Recommendation 22

The Treasury should examine whether it is appropriate that ongoing indemnity payments are included in the debt targeted by the fiscal rules, subject to maintaining the credibility of the UK’s macroeconomic framework. For any future rounds of QT, the Treasury and Bank should commit to revisiting whether it would be possible and appropriate to account for profits and losses in a way analogous to the deferred or derivate asset approach being employed in the US and elsewhere. In particular, the 2012 decision to remit cashflows quarterly between the Bank and the Treasury should be reconsidered, should future QE generate profits. (Paragraph 92) 38 Quantitative Tightening