The Council does not have permanent financial advisers for Treasury Management. We do use two firms of money brokers in London on a daily basis who provide some insight into the money market and current developments. We do however use advisers for the purposes of reviewing our list of organisations with which the Council is authorised to make short term investment deposits (the Council only makes deposits for three months or less under our Treasury Policy statement). The firm we commissioned to review our investment deposits list, which led to the amendment and approval of the list in February 2008, were Focus on Banking, a specialist company advising specifically on banking arrangements and associated risk.

Credit ratings are used to determine which institutions are placed upon the investment deposits list. As mentioned above the Council does not invest for periods longer than 3 months and therefore only short-term ratings apply. The Council uses Fitch ratings, which are internationally accredited ratings used by many organisations including UK local authorities.

The responsibility for investing in any institution on the investment deposits list is governed by the Council's approved Treasury Policy Statement. The Council's Executive determines all matters relating to Treasury Management, with the exception of the Council's overall borrowing limit - this decision must be taken at a meeting of the full Council. The Executive delegates decisions on investments to the Director of Resources. Investments must however be undertaken only with institutions on the approved investment deposits list.

As mentioned above the Council uses Fitch credit ratings. Landsbanki had an F1 rating at the time of the amendment of the investment deposits list earlier in the year and the rating remained at this level until 30^th September 2008. This is defined as “Highest credit quality. Indicates the strongest capacity for timely payment of financial commitments”. There was no downgrading of the Landsbanki short term rating by Fitch until 30^th September and the Moody's rating was not changed until after 30^th September.

The Council does not and has not at any stage invested in Banks with “low credit ratings”.

As in point 5 above, there has not been any investment in Banks with low credit ratings and therefore the issue of any sanctions against any person does not apply.