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Seigniorage

Seigniorage. Seigniorage, ( seignorage ) Entrepreneur, arbitrage, tranche. Prepared by Conall Boyle March 2007. (Bank of England). ^ Seigniorage?. Bank of England (BoE) Annual Report and Accounts p91. Issue Department Account for the period ended 28 February 2007

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Seigniorage

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  1. Seigniorage Seigniorage, (seignorage) Entrepreneur, arbitrage, tranche Prepared by Conall Boyle March 2007

  2. (Bank of England) ^ Seigniorage?

  3. Bank of England (BoE)Annual Report and Accounts p91 Issue Department Account for the period ended 28 February 2007 2007 2006 Note £m £m Income and profits Securities of, or guaranteed by, the British Government 628 619 Other securities and assets including those acquired under reverse repurchase agreements 1,082 1,124 1,710 1,743 Expenses 2 Cost of production of Bank notes 36 28 Cost of issue, custody and payment of Bank notes 17 14 Other expenses 4 3 57 45 Payable to HM Treasury 1,653 1,698

  4. ( payment to GB: £1,653) £38,449 - £36,920 difference = £ 1,569

  5. Bank of England (BoE)Annual Report and Accounts p91 Statement of balances: 28 February 2007 2007 2006 Note £m £m Assets Securities of, or guaranteed by, the British Government 3 13,370 13,370 Other securities and assets including those acquired under reverse repurchase agreements 4 25,079 23,550 Total assets 38,449 36,920 Liabilities Notes issued: In circulation 5 38,449 36,914 In Banking Department – 6 Total liabilities 38,449 36,920 ( payment to GB: £1,653) difference = £ 1,569

  6. notes: 3 Securities of, or guaranteed by, the British Government2007 2006£m £mWays and Means advance to the National Loans Fund 13,370 13,37013,370 13,370The Ways and Means advance earns interest at the Bank’s repo rate.4 Other securities and assets including those acquired underreverse repurchase agreements2007 2006£m £mDeposit with Banking Department 49 53Short-term reverse repurchase agreements 10,030 17,497Longer-term reverse repurchase agreements 15,000 6,00025,079 23,5505 Notes in circulation2007 2006£m £m £5 1,100 1,052 £10 5,886 5,591 £20 23,740 22,690 £50 6,705 6,510 Other notes(a) 1,018 1,07138,449 36,914(a) Includes higher value notes used as cover for the note issues of banks in Scotland and Northern Ireland in excess of their fiduciary issues

  7. Information from Bank of England Annual Reports. Only 2 years info per Report; earlier Reports not on-line, were supplied to me directly.

  8. From BoE Annual Report, but can also be found as M0 elsewhere. Some discrepancies

  9. Calculated by CB from the published figures

  10. The only clue to the nominal rate of interest ‘earned’ on Note-issue?

  11. Source: BoE statistics publications. Averages shown for previous year to roughly coincide with Report publication date.

  12. Seigniorage (Bank of England Style) Seigniorage for the year = Total Note Issue X Average Bank Rate

  13. BoE uses the S. word! Seigniorageby Willem H. Buiter Professor of European Political Economy European Institute, London School of Economics and Political Science from LSE Economics website Discussion Paper 2007-8 March 1, 2007. Buiter was one of the MPC external appointments.

  14. Use cash – back Britain Keep one of these in your wallet/handbag; earn 25p for us. Use a cheque or credit card – Nil USE CASH ONLY! IT’S PATRIOTIC! (and saves us paying tax)

  15. Make ‘em pay! • For their raw materials M3/M4 - £1,550,000 mn @ 5.50% £85,000 mn

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