13 APRIL 1991, Page 21

Precious metals

MY PET plan for imprudent building societies — making them invest in gold bars — has put business in Peter Hambro's way (Letters, page 22) and has given the banks an idea about their heptagonal mountain. This is the vast pile of 50p pieces which clutter their tills. Everyone wants to pay them in, nobody wants to take them out, and the banks, which began to com- plain when they were stuck with 50 million of them, now have 70 million. They have been thinking of melting them down, or converting them into junk jewellery, or offering them back to the Treasury as ready made hard ecus. Now the banks say these are just the assets that the building societies should be made to hold — secure, high quality, non-interest-bearing, and (an unusual combination) a perfectly liquid asset with no takers. The societies retort that these assets are now imposing a much-needed discipline on banks. The Treasury, which, through the Mint, has palmed off this useless pile of cupro-nickel for £35 million, just laughs heartily and doesn't want to know.