Sterling Talks End In Basle

Press, Volume CVIII, Issue 31726, 9 July 1968, Page 13

Sterling Talks End In Basle

(N.Z.P. A. -Reuter—Copyright) BASLE, July 8. Western Central Bankers have gone home today after week-end talks on a support operation for sterling.

Sir Leslie O’Brien, Governor of the Bank of England, told reporters: “You will not have to wait long for an announcement There is no justification for the market to be gloomy. We don’t want the market to think nothing has happened this week-end.” While observers in Basle said an announcement might be made today—in February, the news was given in London the day after the bankers had renewed a SUSIOOOm stand-by credit for Britain, a British Treasury spokesman said this was speculation. Dr Karl Blessing, president of the West German Federal Bank, who indicated that help for Britain seemed unlikely to be in the form of a loan, added: “We know of no announcement to be made about our discussions here.”

According to some sources, the final plan, in the form of a package deal, will be drawn up by the Central Bankers at their next meeting in Basle in September. Not all aspects of the deal have been dealt

with yet, and any London announcement is likely to be in the form of a holding statement The essential part of the deal will be to underwrite part of the sterling balances held overseas to insure against any further devaluation of the pound. The most likely vehicle for this guarantee would be the Bank for International Settlements, which, the sources say, would accept the balances as dollar debts against a six-to-seven-year debt from Britain. This would, in effect, be the same as granting Britain a credit to the amount of the balances taken over.

Other topics the bankers are believed to have discussed include the situation of the French franc—which the Banque de France has been supporting by dipping into its vast gold reserves—and their own gold policy.