The European Union Budget, and Economic and Monetary Policy (EU Exit) Regulations 2019

Bank of England U.K.

6.—(1) The Bank of England must not —

(a) provide overdraft facilities or any other type of credit facility in favour of central government, regional, local or other public authorities, other bodies governed by public law, or public undertakings of the United Kingdom; or

(b) purchase debt instruments directly from them.

(2) Paragraph (1) shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by the Bank of England, shall be given the same treatment by the Bank of England as private credit institutions.

(3) Nothing in paragraph (1) prevents the Bank of England from acting in a way that would not have contravened Article 123 of the Treaty on the Functioning of the European Union as that Article applied in the United Kingdom immediately before [F1 IP completion day], and in particular from —

(a) pursuing its monetary policy objectives within the meaning of section 11 of the Bank of England Act 1998 M1 ;

(b) purchasing debt instruments issued by any person listed in paragraph (1) on a secondary market;

(c) maintaining the Government's “ways and means” facility; or

(d) acting as a fiscal agent for the persons listed in paragraph (1);

consistently with that Article.

(4) For the purposes of this regulation —

(a) “overdraft facilities” means any provision of funds to the public sector resulting or likely to result in a debit balance;

(b) “other type of credit facility” means any —

(i) claim against the public sector existing at 1 January 1994, except for fixed-maturity claims acquired before that date;

(ii) financing of the public sector's obligations with regard to third parties;

(iii) transaction with the public sector resulting or likely to result in a claim against that sector;

(c) “public sector” means the central government, regional, local or other public authorities, other bodies governed by public law or public undertakings of the United Kingdom;

(d) the following shall not be regarded as a credit facility within the meaning of this regulation—

(i) intra-day credits to the public sector, provided that they remain limited to the day and that no extension is possible;

(ii) the operation of receiving cheques from the public sector, for collection, issued by third parties and credited to the public sector's account before the drawee bank has been debited, if a fixed period of time corresponding to the normal period for the collection of cheques by the Bank of England has elapsed since receipt of the cheque, provided that any float which may arise is exceptional, is of a small amount and averages out in the short term;

(iii) the holding of coins issued by the public sector and credited to the public sector, where the amount of these assets remains at less than 10% of the coins in circulation;

(iv) the financing of obligations falling upon the public sector with regard to the International Monetary Fund.

Textual Amendments

F1 Words in reg. 6(3) substituted (30.12.2020) by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 28

Commencement Information

I1 Reg. 6 in force at 31.12.2020 on IP completion day (in accordance with 2020 c. 1, Sch. 5 para. 1(1)), see reg. 1

Marginal Citations

M1 1998 c.11.