1.   Yet shrinking economies mean falling tax revenues and so larger budget deficits and more government debt.

2.   However, the investment in all assets except for short-term government debt involves some degree of risk.

3.   To this end the Bank attempted to use the reorganization of the Stock Exchange to introduce further competition into the methods by which government debt was sold.

4.   Meanwhile a number of governments abroad were running large and sustained budget deficits, the financing of which was steadily expanding the size of other markets in government debt.

5.   If the deposits begin to build up, the government will probably spend them on paying back government debt.

6.   Funding is thus the conversion of one type of government debt into another.

7.   The Public deposits are usually relatively small, as surplus cash is utilised for repayment of government debts.

8.   The Bank is responsible for issuing new government debt and arranging for its redemption.

9.   Funding is the term applied when the Bank of England attempts to lengthen the maturity of outstanding government debt.