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Finance: Gilts

House of Lords written question – answered on 28th June 2012.

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Photo of Lord Higgins Lord Higgins Conservative

To ask Her Majesty's Government what is the total value of the gilt-edged securities purchased by the Bank of England as part of its policy of quantitative easing; what is the annual income from those assets; and how those assets are treated in the Bank of England's accounts.

Photo of Lord Sassoon Lord Sassoon The Commercial Secretary to the Treasury

Quantitative easing is implemented through the Asset Purchase Facility (APF). APF transactions are undertaken by a subsidiary company of the Bank of England, the Bank of England Asset Purchase Facility Fund Ltd (BEAPFF). As the Bank of England annual report explains, the BEAPFF accounts are not consolidated in the Bank's financial statements, as the Bank has no economic interest in its activities. The BEAPFF borrows from the Bank to pay for the purchases it makes. The Bank's loan to the BEAPFF appears as an asset on the balance sheet of the banking department of the Bank of England.

To ensure that the BEAPFF is operated in an open and transparent manner, the Bank publishes a quarterly report on the transactions as part of the facility and an annual report which contains the financial statement of the facility. These can be found on the bank of England's website: http://www.bankofengland.co.uk/markets/Pages/apf/default.aspx.

The BEAPFF has purchased £325 billion of gilts to date, details of which, including the nominal value of the gilts, coupon rates and maturities of the specific gilts held, are also available on the Bank's website.

The 2010-11 BEAPFF annual report stated that the BEAPFF held £11.8 billion of cash holdings at the balance sheet date, primarily representing coupons received (2010: £3.8 billion).

The 2011-12 BEAPFF annual report will be published in due course.

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