approval before making a bid. The HSBC is known to have

bid for the RBC against the Bank of England's wishes.

Following Ministerial discussion, the lobby was informed

that the Government does not intend to introduce such

legislation.

4.

The statements on banking supervisión in Hong Kong made

by the Lord Privy Seal on 18 November were interpreted by

some as an indication of Governmental support for HSBC's

bid. However, HMG takes no position on the commercial

merits of either bid. Only concern is that Hongkong and

Shanghai Banking Corporation should not be descriminated

against on grounds of its incorporation in Hong Kong.

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