Hon. Mitchell Sharp (Minister of Finance):
Mr. Speaker, it might assist the house if I were to report briefly on week end developments involving international financial arrangements.
The house will, I am sure, welcome the decisions announced yesterday in Washington by the governors of the central banks contributing to the gold pool. The governors supported the policy of the United States government in continuing to buy and sell gold at the existing price of $35 an ounce in transactions with monetary authorities. They expressed the belief that henceforth officially held gold should be used only to effect transfers among monetary authorities, and therefore they decided no longer to supply gold to the London market or any other gold market. They stated that as the existing stock of monetary gold is sufficient in view of the prospective establishment of the facility for special drawing rights, they no longer feel it necessary to buy gold from the market. They agreed that henceforth they will not sell gold to monetary authorities to replace gold sold in private markets.
The governors of the central banks contributing to the gold pool invited the co-operation by other central banks in the policies they had agreed on. The governor of the Bank of Canada has promised his co-operation, and I have assured him of the support of the government in this regard.
Further to strengthen the international monetary system, the federal reserve board of the United States announced yesterday an increase of U.S. $2,275 million in its "swap network" with other central banks and the Bank for International Settlements. The governor of the Bank of Canada announced that as part of this arrangement the reciprocal credit facility between the Bank of Canada and the federal reserve system has been increased from U.S. $750 million to U.S. $1,000 million.
With the leave of the house I wish to table two press releases I issued last night, and one issued last night by the governor of the Bank of Canada, as well as the communique of the gold pool issued in Washington, to which they refer.
Subtopic: REPORT ON WEEK END INTERNATIONAL DEVELOPMENTS