Seigniorage

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Seigniorage

• Seigniorage,
• (seignorage)
• Entrepreneur,
• arbitrage,
• tranche

Prepared by Conall Boyle March 2007
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(Bank of England)
Seigniorage?
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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

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( payment to GB 1,653) 38,449 - 36,920
difference 1,569
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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

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notes 3 Securities of, or guaranteed by, the
British Government 2007 2006
m mWays and Means advance to the
National Loans Fund 13,370 13,370 13,370
13,370The Ways and Means advance earns interest
at the Banks repo rate.4 Other securities and
assets including those acquired underreverse
repurchase agreements 2007
2006 m mDeposit with Banking
Department 49 53Short-term
reverse repurchase agreements 10,030
17,497Longer-term reverse repurchase agreements
15,000 6,000 25,079 23,5505 Notes in
circulation 2007 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
1,071 38,449 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
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Information from Bank of England Annual Reports.
Only 2 years info per Report earlier Reports not
on-line, were supplied to me directly.
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From BoE Annual Report, but can also be found as
M0 elsewhere. Some discrepancies
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Calculated by CB from the published figures
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The only clue to the nominal rate of interest
earned on Note-issue?
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Source BoE statistics publications. Averages
shown for previous year to roughly coincide with
Report publication date.
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Seigniorage (Bank of England Style)

• Seigniorage for the year
• Total Note Issue
• X
• Average Bank Rate

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BoE uses the S. word!

• Seigniorage by 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.
•  

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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!
• ITS PATRIOTIC!
• (and saves us paying tax)

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• Make em pay!
• For their raw materials
• M3/M4 - 1,550,000 mn
• _at_ 5.50
• 85,000 mn