Asked by: Lord Spellar (Labour - Life peer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 13 February 2020 to Question 13414 on Debts: China, whether his Department has made a revised assessment of that risk level since the answer was given.
Answered by John Glen
Recent data suggests that Chinese debt increased further in the first quarter of 2020, as the Covid-19 shock is pushing public and private borrowing even higher.
Several institutions, including the International Monetary Fund, raised concerns prior to the Covid-19 outbreak on the risks high levels of Chinese debt could pose to global financial stability. The Covid-19 shock is likely to exacerbate these risks.
In its interim Financial Stability Report published on 7 May 2020, the Bank of England’s Financial Policy Committee found that major UK banks should remain resilient to the Covid-19 shock to both UK and global economies, including China. HMT will continue to work alongside both the Bank of England and global institutions in monitoring the risks posed by Chinese indebtedness.
Asked by: Lord Spellar (Labour - Life peer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect on the (a) UK and (b) world economy of the decision of the German Constitutional Court on funding for the European Central Bank bailout package.
Answered by John Glen
HM Treasury regularly monitors global economic developments, including those in the euro area, and their impact on the UK as part of the normal process of policy development. It is not for the UK Government to comment on euro area monetary policy issues.
Asked by: Lord Spellar (Labour - Life peer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions (a) he, (b) Ministers in his Department and (c) officials in his Department have had with their counterparts in the German Finance Ministry on the decision of the German Constitutional Court on funding for the European Central Bank bailout package.
Answered by John Glen
HM Treasury Ministers and Officials regularly speak with their counterparts in Germany. We have been in regular touch regarding our respective countries' response to COVID-19 and will continue to work closely in the weeks to come. It is not for the UK Government to comment on euro area monetary policy issues.
Asked by: Lord Spellar (Labour - Life peer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect of trends in the level of debt in China on the world financial system.
Answered by John Glen
As highlighted by several institutions, including the International Monetary Fund, there are material risks associated with indebtedness in China.
The Financial Policy Committee of the Bank of England, which is responsible for monitoring risks to financial stability in the UK, reflected the risk of a severe recession in China, which would encompass factors such as its debt levels, in its 2019 stress tests of UK banks. The FPC concluded that the UK banking system would be resilient to this risk.
Asked by: Lord Spellar (Labour - Life peer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has taken steps to release assets held by the Bank of England to the Official Representative to the UK of interim Venezuelan President Juan Guaidó; and if he will make a statement.
Answered by John Glen
Assets held on behalf of foreign central banks are a matter for the Bank of England. HM Treasury only has direct control over the UK Government’s own holdings of gold within its official reserves, which are held at the Bank of England.