Banks (Foreign Exchange Dealings)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 21st October 1969.

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Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney 12:00 am, 21st October 1969

asked the Chancellor of the Exchequer whether he will name the banks which have been officially reprimanded for irregularies in foreign exchange dealings.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

No, Sir. The inquiries which were made revealed irregularities by a small number of banks, each of which has given an assurance that these will not recur. My right hon. Friend does not propose to take any further action in respect of these particular irregularities but this area of foreign exchange operations is being kept under close scrutiny.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

Why should banks be immune from the general proposition that offenders should be named—pour encourager les autres? Is it not the case that these banks were holding foreign currency reserves which they should not have held and which should have been handed over to the United Kingdom foreign currency reserves? By this debt have they not been weakening sterling, and would not sterling be stronger than it is if they had acted properly? Will the Minister make certain that there is no further cause for offence?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

On the latter part of the question, yes. As I have indicated, we are taking special steps to keep this area under constant review.

On the first part of the question, these irregularities arose out of slackness of control which resulted in either an excess amount or too small an amount of foreign currency being held.