CONFIDENTIAL
(iii) Directly increase the number of independent
banks in Hong Kong by breaking up the larger hanks (ordering them to divest themselves of subsidiaries).
(iv) Consider what new categories of limited banking
licenses to create.
(v) Consider what type of liquidity requirement, if any, and other rules, to impose on deposit- taking (ie finance) companies.
(vi) Banks should be required to declare publicly
(as they did before 1974) the size of non-resident's deposits, and foreign currency holdings and government deposits as well.
(vii) "... while banks should be consulted about
monetary and regulatory policies, a somewhat more distant relationship to government would contribute to a policy environment in which greater weight could be given to the public interest vis-à-vis the bank's commercial interest." (5.29)
爨
(viii) Avoid ad-hocery' in dealing with reform of the
banks and bank ordinances.
INDUSTRIAL ECONOMIC POLICY
11.
C. Since the products from Hong Kong's export industries compete with naked world prices in very competitive markets there can, from an economic point of view, be nothing wrong
However some with the structure of the export industries. importing and domestic industries "... (eg banking, transportation facilities)" may contain monopolies and there could be monopsony in factor markets (eg collusion among employers in determining wages)". (para. 2.21)
**
12. Towards Land C. Capital and labour are not scarce factors of production in Hong Kong. Land and water are, and so no land-intensive (eg bulk storage, agriculture) or water-intensive (eg steel, chemicals) industires should be encouraged, even if they do succeed in germinating in such a well-priced economy. Land policy is a good economic tool for adjusting the structure of industry - in the late 1960's it was the main constraint on industrial growth.
13. R. (i) Encourage small manufacturers since they have
the highest job/acre ratios.
(ii) The costs and benefits of subsidies in land
prices (designed to encourage certain foreign firms) should be quantified.
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/141.