CONFIDENTIAL & PERSONAL
HONG KONG: MONETARY MANAGEMENT AND INSTITUTIONS:
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ADDENDUM
An advantage of the approach which I advocate is that it seems to be fairly closely in tune with the thinking as I understand it of the Governor. Some time ago, in response to Mr Royle's initiative, he suggested that perhaps the way forward lay in the appointment of an expert possibly a merchant banker. At that time, I gave it as my view that such an appointment might have merit, provided that the right man could be found for the job, provided that he could be given an appropriate role in Hong Kong, and provided that he had access to a broader spectrum of views than is perhaps available in the rather cloistered atmosphere in Hong Kong These provisos still stand: but following my visit I find myself coming round to the view that something like the Governor's approach may be the only feasible way of getting something started.
2. Even so, I think that we must recognise that there is still a good deal of delicacy in the situation. I will give three examples Firstly, when I outlined to the Governor my tentative thoughts (essentially a much abbreviated version of what appears in this paper) he said that he thought I would find that the Financial Secretary shared some of my unease. If he does, he did not reveal himself to me. Perhaps this was only because it takes a longer time than was available to break through to a level behind the inevitable intellectual sparring match. Moreover, I can well understand a reluctance to reveal any different or deeper thinking to someone, and perhaps especially someone from the FCO, on a brief visit. Secondly, the Governor told me that he had a tentative discussion with a merchant banker friend when he was here on leave. Apparently it was suggested to him that the Governor of the Bank of England, as a man with extensive contacts and experience in both the private and public sector, might have some ideas. time prevented the Governor (of Hong Kong) following up this lead. Having told me this, he warned me not to mention any of this to the Financial Secretary, who was not aware of the Governor's activities.
/Thirdly
Pressure of
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