LONDON (AFX) - The Bank of England is making internal preparations for the possible entry of the UK into the euro, according to its annual report released today.
The report said the aim of the exercise is to put "the bank in a position to go ahead should Parliament decide to do so."
The BoE is also assisting the Treasury "in its broader planning of a UK national changeover, in the event of UK entry," the report said. It said the bank is represented at each level of the Treasury's project structure and is responsible for coordinating the preparations necessary for financial markets to switch from sterling to euro.
"The focus has continued to be on planning, in order to minimise the time which would ultimately be required for implementation if the decision to join were taken," it said.
The report said the BoE has worked with market practitioners, mainly through the City Euro Group, which meets roughly three times a year and numbers 60 representatives.
"With members' help, there is now as fully articulated a plan as possible, detailing how sterling transactions and the underlying financial instruments would become re-denominated into euro, subject to decisions from government and market authorities," it said.
Last night, BoE governor Eddie George welcomed the pledge by chancellor of the exchequer Gordon Brown to take "cautious and considered" approach to the assessment of the viability of euro entry.