[ad_1]
A group of British lawmakers said on Friday that as much as £ 50 billion ($ 67.4 billion) in cash was “missing”, and urged the Bank of England to investigate.
The money is “hidden somewhere but the Bank of England doesn’t know where, by whom or why – and doesn’t seem very curious”, Meg Hillier, chair of the House of Commons Public Accounts Committee (PAC), public finances, said in a statement. “He needs to be more concerned with where the missing 50 billion pounds are,” she added.
The Bank of England immediately pushed back. “Members of the public do not have to explain to the bank why they wish to hold notes. This means there is no shortage of notes,” a spokesperson said in a statement, adding that the central bank would continue to respond to public demand for tickets.
“We are seeing an increasing use of cash as a store of value, as opposed to transactional purposes,” Sarah John, chief cashier of the Bank of England, said during testimony before the Public Accounts Committee in October. Concern for the solidity of financial institutions since 2008 crisis have also contributed to this, she added.
And while there was a sharp drop in demand for banknotes and coins during the coronavirus lockdown peak this year it has since recovered, with people storing even more cash at home due to the pandemic.
The number of banknotes in circulation in Britain reached an all-time high of 4.4 billion in July, with a total value of 76.5 billion pounds ($ 103 billion), according to a September report by the National Audit Office (NAO), which monitors government spending. This compares to 1.5 billion banknotes worth around 24 billion pounds sterling ($ 32.3 billion) in 2000.
The Bank of England estimates that between 20% and 24% of the value of banknotes in circulation are used for cash transactions with an additional 5% held by UK households as savings.
“Little is known about the rest, worth around £ 50bn, but possible explanations include holdings overseas for transactions or savings and possibly holdings in the UK domestic savings not declared or for use in the underground economy, ”the NAO said in its report.
He recommended that the central bank, working with other public authorities, improve its understanding of what is driving the increased demand for banknotes and who holds the £ 50 billion.
“This work could help inform a broader policy, for example on tax evasion,” he added.
Risks of financial exclusion
the DO NOT The report warned that decreasing cash usage could increase the risk of financial exclusion if companies stop accepting cash due to rising costs associated with falling volumes. Just over a million UK adults do not have a bank account or real estate company account, the report said, citing data from the Financial Conduct Authority.
“There is certainly a link to poorer areas that still rely on cash much more than in some city centers,” John told PAC.
There are currently five government agencies responsible for administering or overseeing the UK treasury system, including the Bank of England, the Treasury, the Royal Mint, the Financial Conduct Authority and the Payment Systems Regulator.
[ad_2]
Source link