SECRET
DD 08010OZ HONG KONG
HKK
10017
GRS250
SECRET
20 OCT 1983
JOHY
IND
on Taken
DESKBY 080100Z
FM FCO 071630Z OCT 83
TO IMMEDIATE HONG KONG
23002 1
Mr. Hymn Нит
-25%
12710
TELEGRAM NUMBER 1020 OF 7 OCTOBER
FOLLOWING STRICTLY PERSONAL FOR FINANCIAL SECRETARY AND
CHIEF SECRETARY FROM GOVERNOR
49
30
1. MANY THANKS FOR YOUR TELS NO 1489 AND 1490. I SAW THE
CHANCELLOR WITH HIS ADVISERS THIS AFTERNOON. THEY WERE
METICULOUS IN RECOGNISING THAT THE DECISION IS FOR US AND IN
RECOGNISING THAT THEY WERE NOT DIRECTLY FAMILIAR WITH THE HONG
KONG SCENE. BUT THE IMPLICATIONS OF WHAT THEY SAID WAS CLEAR
THE RISKS OF A COLLAPSE OF THE HONG KONG ECONOMY ARE SUCH THAT
IF THEY WERE IN OUR SHOES THEY WOULD INTRODUCE THE SCHEME AND
SOON.
2.
SANDBERG SPOKE TO ME ON HIS DOUBTS ABOUT IT TODAY. HE WAS
PARTICULARLY CONCERNED WITH THE DIFFICULTY OF SETTING THE
RIGHT RATE: AND THE DANGERS FOR THE SMALLER LOCAL BANKS. HIS
FEELING WAS THAT WE SHOULD, IF POSSIBLE, DEFER A DECISION.
3. I HAVE CONSIDERED WHETHER TO ASK HIM TO RETURN FOR THE
WEDNESDAY EXCO. IN FAVOUR OF DOING SO IS THE ADVANTAGE OF HAVING
THE CHAIRMAN OF THE MAIN NOTE ISSUING BANK IN HONG KONG WHEN
WE TAKE THE DECISION. AGAINST THIS IS THE SPECULATION HIS
SUDDEN RETURN MIGHT CAUSE.
WHAT WOULD YOU ADVISE? MY OWN INCLINATION IS TO WARN HIM
THAT WE MAY WELL HAVE TO DIVIDE IN THE MIDDLE OF THE WEEK I
SUGGEST THAT HE MAY WANT TO BE THERE.
5. PLEASE WOULD ONE OF YOU TELEPHONE ME AT THE SHERATON PARK
TOWER HOTEL TELEPHONE NO 01-235-8050 ROOM 1001 AT 0700 LONDON TIME
(2PM HONG KONG TIME) SATURDAY TO LET ME HAVE YOUR VIEWS ON THE
ISSUE OF SANDBERG'S RETURN.
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