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Bank acts on £5 note distribution Bank acts on £5 note distribution
(10 minutes later)
The Bank of England is to look at how it can encourage banks to issue more £5 notes, the number of which has fallen compared with other denominations.The Bank of England is to look at how it can encourage banks to issue more £5 notes, the number of which has fallen compared with other denominations.
Bank governor Mervyn King said it had £1bn worth of £5 notes in its vault but high street banks did not want them.Bank governor Mervyn King said it had £1bn worth of £5 notes in its vault but high street banks did not want them.
They found it cheaper to issue £10 and £20 notes and the shortage of "fivers" in circulation led to their "noticeably soiled and scruffy" condition, he said.They found it cheaper to issue £10 and £20 notes and the shortage of "fivers" in circulation led to their "noticeably soiled and scruffy" condition, he said.
He said the Bank would look at offering incentives for banks to stock more.He said the Bank would look at offering incentives for banks to stock more.
Mr King noted that the circulation of the £5 note had not increased in 15 years and that over that period the average time they remain in the banking system has doubled.
"The problem is not at the production end - we have an ample supply of new £5 notes waiting to be used," he said during a speech to financiers at London's Mansion House.
"There is a need for an adequate supply of low denomination notes that can be used for small transactions," he added, but accepted that the public convenience may not "correspond to the private interests of commercial banks".