108g/mg1.pa O'MARA (547)
ради
7
Peter Morris Esq
HM Treasury
Parliament Street London SW1P 3AG
Hong Kong Department
Switchboard 01-270 3000
Direct Dialling 01-270.4.699
Foreign and Commonwealth Office Downing Street East
London
Dear Peter,
HKC 102/5
28MAPK
21 March 1989
BACKING FOR HONG KONG FIDUCIARY NOTE ISSUE
ISSUE
I am writing to confirm that, as I told you yesterday, we are content with the HSBC's suggestion that United States Treasury Notes should be used as a backing for fiduciary note issues. I am sorry you have had to wait so long for a reply.
last
The fiduciary note issue is very small (only HK$60 million in the case of HSBC and HK$35 million for Standard Chartered) and while both the note-issuing banks have the option of using gilts as backing, the Bank of England tell us that Standard Chartered deposited British Government stock in November 1977 and HSBC discontinued doing so in May 1978. On this basis, using US Treasury Notes as backing will clearly have no implications for the UK gilt market and, given the link between the Hong Kong and US dollars, the proposal seems eminently sensible to us.
your fuceres,
Margaver O'har Марань
MISS M O'MARA