Section 1: The provision of financial services to the UK economy

1. Section 1: The provision of financial services to the UK economy

2. Chart 1.1 Sight deposits with UK banks(a) Source: Bank of England. (a) Twelve-month growth rates. (b) Includes individuals, unincorporated businesses and non-profit institutions serving households.

3. Chart 1.2 Velocity of transactions and savings money(a) • Sources: Bank of England and ONS. • (a) Velocity is nominal GDP divided by money. • Savings is M4 excluding intermediate OFCs minus notes and coin. Intermediate OFCs are: • mortgage and housing credit corporations; non-bank credit grantors; bank holding • companies; and those carrying out other activities auxiliary to financial intermediation. • (c) See footnote (2) on this page.

4. Chart 1.3 Spreads on sight deposit rates(a) Source: Bank of England. (a) Effective sight deposit rates minus three-month Libor.

5. Chart 1.4 Advertised current accounts Sources: Moneyfacts Group plc and Bank calculations. (a) Percentage of currents accounts with overdrafts

6. Table 1.A Selected payment systems(a) • Sources: Bank of England, CLS Bank International, Euroclear UK & Ireland, UK Payments Administration and Bank calculations. • Operational availability shows percentage of time systems have been available to process transactions during their normal • opening hours. FPS data start in June 2008, its first full month of operation. CLS volumes and values are measured in sides. • There are two sides to most foreign exchange transactions settled in CLS. Value figures report the total settlement obligations • (effectively double the ‘value’ of the underlying transactions). Volume figures report the number of sides before splitting • (the process of breaking down high-value transactions into smaller parts in order to improve settlement efficiency). CREST volumes • and values are for sterling settlement only and do not include liquidity flows generated by the self-collateralising repo mechanism.

7. Chart 1.5 UK banks’ aggregate reserves account balances(a) Source: Bank of England. (a) Current account balances held by commercial banks at the Bank of England.

8. Chart 1.6 Household and corporate credit availability(a) • Source: Bank of England Credit Conditions Survey. • Net percentage balances are calculated by weighting together the responses of those lenders who answered the question as to how • the availability of credit provided to the sector overall changed in the past three months.

9. Chart 1.7 Mortgage spreads by loan to value ratios and product availability(a) • Sources: Moneyfacts Group plc and Bank calculations. • End-month advertised rates for floating-rate products across different loan to value (LTV) ratios. Size of bubble • reflects product availability. The spread is calculated over Bank Rate at the end-month for the relevant period. • The first observation on the left is for products up to 65% LTV ratio, the second is for products in the 66%–75% • range, the third is for products in the 76%–85% range and the final observation on the right is for products above 86% LTV ratio.

10. Chart A BIS banks’ consolidated foreign claims on non-bank private sector(a)(b) Sources: BIS, IMF World Economic Outlook (April 2010) and Bank calculations. (a) All claims as a percentage of 2009 nominal GDP. (b) Data to end-2009, adjusted for risk transfers. Excludes guarantees and derivatives.

11. Table 1 Provision of UK banking services by selected foreign-owned UK-resident banks Sources: Bank of England, published accounts and Bank calculations. (a) Includes deposits from unincorporated businesses and non-profit institutions serving households. (b) Lending to small and medium-sized enterprises only. (c) May differ from the sum of individual contributions due to rounding.

12. Table 2 Provision of lending services by selected foreign-owned UK-resident banks Source: Bank of England. (a) May differ from the sum of individual contributions due to rounding.

13. Chart 1.8 Lending to UK individuals and businesses(a)(b) Source: Bank of England. (a) Three-month annualised growth rates. (b) Lending by UK monetary financial institutions to UK PNFCs, and by UK monetary financial institutions and other lenders to individuals. Data cover lending in both sterling and foreign currency, expressed in sterling terms. Seasonally adjusted.

14. Chart 1.9 Credit conditions (across firm sizes)(a) • Source: Bank of England 2010 Q1 Credit Conditions Survey. • The bars show the responses over the previous three months. The green diamonds show the expectations over the next • three months. A positive balance indicates an increase in availability and cheaper credit.

15. Chart 1.10 Bank lending to UK non-financial corporations(a) Sources: Bank of England, Bank for International Settlements (BIS) and Bank calculations. (a) Quarterly growth rates. (b) From UK-resident monetary financial institutions. (c) Lending by BIS banks to UK non-banks, including syndicated loans.

16. Chart 1.11 Primary market functioning(a) • Sources: Bank of America Merrill Lynch, Bloomberg, Dealogic, JPMorgan Chase & Co. and Bank calculations. • Shading is based on a score that reflects issuance (relative to GDP) and spreads at issue of publicly placed • debt without government guarantees, both expressed as a number of standard deviations from average. Standard • deviations and averages were calculated using as much data as was available from January 1998.

17. Chart 1.12 PNFCs’ net finance raised(a) Source: Bank of England. (a) Three-month moving averages. Includes sterling and foreign currency funds. (b) Non seasonally adjusted. (c) The total may not equal the sum of its components.

18. Chart 1.13 Sterling investment-grade corporate bond spreads Sources: UBS Delta and Bank calculations. (a) Asset Purchase Facility announcement. (b) Corporate bond facility launched. (c) Option-adjusted spread over government rates. (d) Based on 444 investment-grade sterling bonds issued by non-bank firms.

19. Chart 1.14 Activity in exchange-traded derivatives markets(a) Source: BIS. (a) Turnover in the number of contracts. (b) Commodity contracts include both futures and options contracts. (c) Interest rate, currency and equity index derivatives on all exchanges.

20. Chart 1.15 Average daily flows over LCH.Clearnet Ltd’s UK-embedded payment system(a) • Sources: LCH.Clearnet Ltd and Bank calculations. • Data are at a monthly frequency and adjusted to account for errors and omissions. Flows represent the value of payments • between LCH.Clearnet Ltd and its members through the twelve banks that participate in its UK-embedded payment system.

21. Table 1.B Recent developments in clearing of OTC derivatives Sources: CME Group Ltd, Eurex Clearing AG, Intercontinental Exchange Inc. and LCH.Clearnet Group Ltd.