Recommendation 18

We have received proposals for interventions that would cut the remuneration of bank reserves and thereby reduce the ongoing losses arising from QE and QT. However, we have also received evidence that cutting remuneration now could be similar to a default, and that any scheme tied to commercial banks’ holdings of reserves could undermine financial stability. Overall, we do not support cutting the renumeration of Bank reserves. We believe taxes on banks should be set through Parliament in a Finance Bill.