TNAG-0126-FCO40-162-Sterling-balances-1970 — Page 72

CONFIDENTIAL

-2-

اسا

ت

2.

A SITUATION KAY WELL ARISE WHERE BANKS REQUIRE COVER IN EXCESS OF

THE PRESENT LIMIT BEFORE THE FULL LEGISLATIVE PROCESS OF AMENDMENT

CAN BE CARRIED CUT. I PROPOSE, SHOULD THE NEED ARISE, TO EXCEED THE

LIMIT ADMINISTRATIVELY IN THE ABSENCE OF LEGISLATIVE SANCTION. ANY

OTHER COURSE OF ACTION COULD HAVE UNFORTUNATE REPERCUSSIONS.

3. I SHOULD ADD THAT ALL THE EVIDENCE INDICATES THAT THERE IS NO

SIGNIFICANT INFLATION OF THE LEVEL OF OUR GUARANTEE ARRANGMENTS OVER

AND ABOVE BANKS' PROPERLY HELD UNDERLYING STERLING ASSETS IN FORMS

ELIGIBLE FOR GUARANTEE.

SIR D. TREICH

DEPARTMENTAL DISTRIBUTION

X.K.D.

F.P.A.D.

ECONOMISTS DEPT.

RESEARCH DEPT.

NEWS DEPT.

F.E.D.

CONFIDENTIAL