JV QUESTIONS - G8 FINANCE MINISTERS MEETING
Note: Joan Veon is a freelance journalist and these are her questions in a press briefing to Robert Rubin, Madeline Albright, Valerie Strachan; British Customs Office, and Hugh Evans; The Bank of England. Information from Bank of England Muesum.
QUESTION TO ROBERT RUBIN:
You have stated that the President should veto the Financial Services Bill- Is that because it does not allow for the Basle Capital Accord?
A. - Rubin:
The President is a strong proponent of financial reform. The Bill in the House of Representatives has additional restrictions which we think are inappropriate and prohibit conducing non-bank activities in subsidiaries.
We are strong proponents of financial modernization
JV: Would the Basle Capital Accord principles being adopted--would they go through the Senate or are they a matter of adaptation?
Rubin: The Adaptation of BIS Standards does not require Congressional approval.
Question to Madeline Albrecht:
Could you comment on the way foreign ministers work together since the Denver Summit where you said you discussed how you could work together every day of the year?
No doubt about the fact that we operate together very frequently in terms of dealing with the kind of issues in our Communiqué which is our daily bread--Foreign Ministers meet alot. Able to stay in touch-- give credit to Foreign Secretary Cook - he is a terrific chairman--better than when I chaired the Denver Summit. There is really a lot of contact among us all and [we are] developing a very close relationship in terms of these issues.
Question to Colin Budd - Economic Director.....
Q. How does...impact international law?
Question to Valerie Strachan - British Customs Office, working with the G8 Criminal Division
Q. How far along or integrated are we with the UN from a legal standpoint going down to your local police departments.
A. it does not work quite like that. That would imply the type of relationship that you have in a country where this organization tells that organization what to do and it is not that kind of relationship.
JV: No, but through MOU's, other legal agreements, you then have working cooperations...(Valerie: Yes yes.)
Valerie: That's right what you would have would be a framework for agreements--for example--there is (can't remember the official title---but it is a framework agreement about countries making agreements with their own trade associations to act in concert against crime--all under one umbrella. Basically what that top level thing does is provide a kind of framework that says this is the international agreement that you quite when getting together with your trade. We have over 100 agreements with companies, airlines, airports, you name it and under the World Customs Organization---
JV: Under the G8, under transnational Crime is there not some other new type of framework structure or cooperation that transcends/supersedes, as you are looking to bring into line a criminal who could be working from his terminal in his kitchen and stealing from a bank in another country.
Valerie: What you get is a statement out of the G8 which says we have agreed---JV? I am trying to figure out if I am missing something.
Valerie: If you are, I am as well. The G8 gives us an umbrella under which we talk to other countries the G8 says [JV: framework] and every body says, "Oh yeah," we know about G8."
JV: Framework--I think you have summarized it.
INTERVIEW WITH HUGH EVANS FROM THE BANK OF ENGLAND
As I was getting a cookie at a table, Hugh Evans was fixing tea. He happened to speak to me about the question I raised to Colin Budd who could not answer my question.
Hugh Evans: ".... You asked that question on International law---Reflected on the rule of law-- international law. I myself don't think there is a lot of relationship because what is being done-- the IMF/WB--already are entitled to be doing.
Hugh--The one area that I think is different is the liberalization of capital at the IMF--the purposes of the IMF and I think that's where a change in the IMF articles are needed in order to reflect what it is actually doing at the moment.
JV: Does liberalization of capital include intervening in currency markets.
Hugh: Not by the IMF--that's the job of governments and central banks.
JV: Yes, but that's
Hugh: The IMF can give advice but it does not intervene.
JV: In the documents I've read, those are some of the things they are looking to add to IMF powers--to intervene in currency markets, to be the lender of last resorts--my question had to do with---
Hugh: I do not believe the IMF ever has or should intervene in currency markets--I've never seen any suggestion--the IMF advice to countries often is about exchange rates--its about intervention- -it is indirect. The IMF does not intervene--
JV: Yes--these are the things that I have read in documents. I have not conjured these up, I could not even imagine them.
Hugh: My advice would be to ask the IMF. I don't think that this what you will find they are trying to do.
JV: Do you have a card?---(I then saw his badge) Oh, you're from the Bank of England. I was there yesterday. I have a couple of questions for you, do you mind? I was reading that you nationalized your bank.
Hugh: The BOE was nationalized in 1946
JV: What does that mean exactly because of BOE is a or was a private organization.
Hugh: The BOE sin e 1946 has been in public sector and still is.
JV: Who owns it?
Hugh: Um--It's the Government that appoints the senior people at the BOE
JV: Yes, but that does not tell me who owns it---
Hugh: I know it doesn't. It means its a public sector institution. Whether--I am not even sure if it has shareholders--I don't think it does.
JV: So its a corporation without shareholders
Hugh: But it's a public corporation as of 1946.
Veon: What was it before then?
Hugh: It was a private firm before then
JV: (You mean to tell me) The private firm gladly gave up the assets and wealth of the great wealthy Bank of England to the Government of Britain?
Hugh: The government paid for it--no doubt.
JV: Well Hugh: Nationalization means--
JV: I understand what nationalization means--providing money and getting something in exchange. So what document do I find the amount that was conveyed to pay for it?
Hugh: Look--on the Internet JV: I'll be there till I am 85.
Hugh: That's alright--That's alright....(some lady looked at him and said hi and he left--actually he ran from me.)
QUOTES ON THE BANK OF ENGLAND MUSEUM PRESENTATION
"LONDON has dominated the International Trading of gold bars for more than 150 years. It is the but for gold, bringing together producers from around the world with physical buyers, the hedge funds--investors and speculators in the futures markets and the world's central banks.
Most global gold traded is cleared through London Bullion Markets Clearing System and the daily volume of LOCO London gold settlements is substantial--exceeding often 1,000 tons.
Central banks hold 28,000 tones of gold and international organizations (IMF) hold 6,000 tones which equal about $200B.
Today international official gold holdings of central banks total 34,000 tones.
Since the Financial Services Act of 1986, the Bank of England has assumed formal responsibility for the supervision of the wholesale bullion market."
The above are direct quotes from a special presentation the BOE Museum had on gold.
The following is information from a computer type of set up they had on the BOE:
The BOE has a dealing room where they buy and sell currencies and securities for other central banks, the IMF, British government departments, the EU, etc.
Three dealing desks:
1. Foreign Exchange
May intervene in foreign markets to stabilize sterling.
2. British Government
Sterling - British government bonds plus money markets - Lend money to deal with discount houses.
3. Foreign Currency
Manage British currencies reserves around the world in billions of dollars.
The last year could exchange bank notes for gold was 1925 (in the U.S. it was 1933).
"In 1946 the Bank of England was taken into public ownership. this event slipped quietly causing little more than a ripple in the press. The passing of the BOE Act of 1946 was the first piece of a cluster of pieces of nationalizing legislation passed by the newly elected Socialist government led by Clement Atlee."
The Bank founded as a chartered joint stock company in 1694 and remained till 1946 when BOE stock transferred into the hands of Treasury solicitors.
The proposal for a "Bank of England" emerged from a mass of ...... and projects circulating at the beginning of the 1690's. William Patterson, a Scotsman, is generally held to be its originator! A colorful figure, much travelled, he was a keen and regular promotor of financial projects. Paterson's ..... proposed raising L1,200,000 to be lent to the government at 8% on condition that the subscribers were incorporated as a joint stock company with the title, "Bank of England." The particular novelty is that there was no fixed time period for the loan and that interest would be paid in perpetuity. In effect this meant the creation of a permanent national debt. Patterson was backed by a powerful group of City merchants and also by Charles Montagu, one of the Commissioners of the Treasury who persuaded the government to introduce a Bill embodying the scheme. The Act was passed April, 1694."
"And we have in England materials for a Bank which shall furnish Stock enough to drive the Trade of the whole commercial world."
Sir Wlliam Petty, 1682