42.
The cost of maintaining stability was strongly debated during the year politically and by
economic commentators generally. In fact, as the
Financial Secretary pointed out in a general
statement and also to the Legislative Council, the cost was small in relation to the Exchange Fund and negligible to the risks facing the banking sector
since confidence was broken in 1982. The Govern-
ment's aim "has been the protection of the deposits
of the citizens of Hong Kong and the confidence of
bankers here and internationally in our banking
system." In this connection, it should be stressed
that the Commissioner does not act alone. The use
of the Exchange Fund is statutorily a matter for the Financial Secretary. In taking any action which
might result in the use of the Exchange Fund, the
Commissioner has, therefore, an obvious need to
consult closely with Monetary Affairs Branch and the
Financial Secretary. But more generally, in the
administration of the Ordinance there are specific
requirements for consultation on a variety of
issues. The Banking Ordinance gives the necessary powers to the Banking Commissioner which he must be prepared to exercise and, on occasions, immediately
Throughout the year, there was, however, full
consultation within the Government and complete
co-operation when required in various lines of action. This co-operation was assisted during the year by the Deputy Secretary for Monetary Affairs acting for the Commissioner during his absence from
Hong Kong. The banking scene is now vastly changed from January, 1986. The policy of the Commissioner will, however, remain the same, namely to deal with
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