Mr. John Corrigan:

It is not a question of holding it or not holding it; we have to hold it. For example, if we did not pre-fund the funding cliff in 2014, I could say with a reasonable degree of certainty that yields would not be as low as they are today. There is a trade-off between holding substantial amounts of cash and prudent debt management. My colleague, Mr. Oliver Whelan and I meet with other debt managers from around the world once a year. It is a fact that in normal times some smaller countries that have a strong credit rating hold up to 18 months in cash. The cash balances are not unusual. It is regarded as a matter of prudent management to have sufficient cash at one’s back.

The world is an uncertain place, particularly at the moment. Markets do not go in a straight line. We are in a particularly sweet spot at the moment, as reflected in the previous discussion on the absolute level of yields. It behoves us to hold such levels of balances. Some of them are held in the Central Bank and some are out in the market, but we have to look at the counter-party credit risk in putting money out in the market. Very few, if any, banks today have AAA ratings and I do not think the committee or the Committee of Public Accounts would thank us if the balances were to go up in smoke because of the risk taken on some credit counter-party in order to gain an extra few bob on the interest rate. It is something we must do.