CIPFA Scottish Treasury Management Forum Current Investment Practices And Investment Framework Scottish Treasury Management Forum

“review the current investment management practices and bring forward proposals which would form a framework for authorities to work within which will ensure a consistency of approach based on a sound risk assessment in relation to investment opportunities” The 2009 remit was to: Investments - Overview Scottish Treasury Management Forum

Authorities have taken a range of pro-active measures to manage and mitigate the investments risks over the last two years Authorities have different requirements and therefore different appetites for risk In light of their risk appetite, authorities should continue to consider how they manage their counterparty risk e.g. from the perspective of number, level of commitment, quality etc The lessons of BCCI should not be lost on authorities Where appropriate, authorities should consider other investment opportunities 2009 Summary Scottish Treasury Management Forum

Premature Debt Redemption Money Market Funds? Collective Local Authority Investment Product? Government Backed Certificates of Deposit Treasury Bills Other Products? Other Investment Options Scottish Treasury Management Forum

Yield Liquidity Security Scottish Treasury Management Forum

Significant premature repayment of PWLB debt to de-risk investment portfolio A reduction in the periods which deposits are placed for A tightening of credit criteria used to produce the counterparty list Investment with counterparties which would be most likely to receive UK Government and Central Bank support Greater use of instant access accounts Inclusion of additional more secure counterparties such as the DMO Security Actions Already Taken Scottish Treasury Management Forum

Refinancing Risk Scottish Treasury Management Forum Counterparty Risk v.

LGov Fin Stats Total Debt Scottish Treasury Management Forum TMF Gross Debt £11,490,801 (‘000) £10,507,658 (‘000) 31 March 2011 Debt

Whole of Scotland LAs – PWLB Maturity Profile Scottish Treasury Management Forum

Whole of Scotland LAs – PWLB Rates Scottish Treasury Management Forum

Security - Counterparty Concentration Scottish Treasury Management Forum

Security - Counterparty Concentration Scottish Treasury Management Forum

Security / Yield - Deposit Rates Scottish Treasury Management Forum

Investments - Scotland-wide Summary Scottish Treasury Management Forum 2009 £1,003,225, £1,751,095,700 + £748 million

Investments - Scotland-wide Summary Scottish Treasury Management Forum DMO£81,530, %£40,340, % Local Authorities£93,070, %£224,250, % Government Guaranteed£40,000, %£38,496, % European Investment Bank£00.00%£4,714, % £214,600, %£307,800, %

Investments - Scotland-wide Summary Scottish Treasury Management Forum

Investments - Scotland-wide Summary Scottish Treasury Management Forum Money Market Funds£14,968, %£165,133, % Bonds Fund£00.00%£20,000, % Other£00.00%£1,424, % £14,968, %£186,558, %

Investments - Scotland-wide Summary Scottish Treasury Management Forum Nationwide Building Society£68,500, %£36,400, % Other Building Societies£31,900, %£00.00% £100,400, %£36,400, %

Investments - Scotland-wide Summary Scottish Treasury Management Forum Lloyds TSB Bank£20,000, %£5,500, % HSBC Bank plc£22,300, %£20,000, % Barclays Bank£73,500, %£93,557, % Other Banks£59,000, %£60,000, % £174,800, %£179,057, %

Investments - Scotland-wide Summary Scottish Treasury Management Forum Bank of Scotland Plc£228,108, %£469,965, % Royal Bank of Scotland£40,316, %£315,763, % Santander£102,888, %£154,363, % Clydesdale£127,144, %£101,186, % £498,457, %£1,041,279, %

Security / Yield - Deposit Rates Scottish Treasury Management Forum