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Bank rescue detail sought by Labour

Friday 26 March 1993 19:02 EST
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LABOUR yesterday called on the Chancellor to reveal the full extent of the Bank of England's rescue operations in mid-1991 to head off a potential banking crisis.

The Bank disclosed on Thursday that it had put into place a lifeboat operation to support several small banks having difficulty obtaining funds. The operation came in the wake of the BCCI scandal in the summer of 1991, which seriously unsettled the international financial community.

Although the Bank does not usually disclose such sensitive operations, it went public this week after questions were raised in Parliament. The Bank has not offered any details on how many banks or how much money was involved. It said on Thursday it had used its own money, without a government guarantee, to support 'a few small banking institutions'.

Alistair Darling, Labour's City spokesman, called on Norman Lamont to make a statement on the exact nature of the support. 'I want to know how much was spent and where the support came from,' Mr Darling said.

He also wanted to know how many institutions were assisted and whether there was any money outstanding. 'There is no reason why the Chancellor cannot now make a statement. The public has a right to know,' he said.

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