:
CONFIDENTIAL
respectively and the Bank might have been expected to separate out part of the former to add to the .7m accrued interest and
£0.2m excess of receipts over payments.
19. The figures on the various alternatives are
$,000
OFFICIAL
10% deduction as bank
10% deduction as
STERLING
RESERVES
ELIGIBLE COMPENSATION
paragraph 15 above
ELIGIBLE COMPENSATION
BALANCES
BALANCES
As Bank Statement
298,736
260,322 9,795,
259,275
9,755
Additions to end-
February holdings
limited to end-
February
deficiency
296,600
258,186 9,714
257,139
9,675
(on basis of
78.8% MSP)
On actual
end-March
holdings 309,206
269,745 10,149
Even the limitation shown in the second line of the table is not a completely strict application of the modified settlement basis, since the purchases required need only offset the deficiency at transaction cost, not at end-March market values. However, I recommend that we pay compensation on eligible balances which lead to compensation in the range 9,675,000 to £9,755,000, that is applying the correct 10% deduction but allowing additions to end- February holdings at or above the full end-February deficiency depending upon weight given to the considerations in paragraph 17
above.
20. The table above gives £10,149.000 as the amount that would have been payable on actual end-March holdings. Alternative amounts of compensation are lower than this by the following
amounts