CONFIDENTIAL
170173
MDHIAN 806
INDEMNITY AGAINST ANY HIDDEN LIABILITIES AND THE VIEW TAKEN BY THE MAJOR PROSPECTIVE SHAREHOLDERS OF THE VALUE OF BCCHK'S ASSETS, WHICH WILL TAKE SOME TIME TO DETERMINE.
PROSPECTS FOR SUCH A SOLUTION ARE AT THIS STAGE BY NO MEANS GOOD AND UNLESS THEY IMPROVE IN THE INTERIM THE FINANCIAL SECRETARY WILL WISH TO PROCEED WITH HIS APPLICATION FOR A WINDING UP ORDER AT THE COURT HEARING ON 27 AUGUST.
5.
AS REPORTED IN OUR TUR A FEW LOCAL BANKS EXPERIENCED PROBLEMS FOLLOWING THE CLOSURE OF BCCHK THOUGH THESE WERE SHORT- LIVED. THIS WEEK RUMOURS HAVE BEEN SPREADING CONCERNING CITIBANK AND A SIZEABLE NUMBER OF DEPOSITORS HAVE BEEN WITHDRAWING THEIR FUNDS PARTICULARLY IN THE FORM OF BANK NOTES. CITIBANK IS WELL ABLE TO COPE AND HAS MADE IT CLEAR THAT IT DOES NOT REQUIRE ANY HELP FROM US. THE RUMOURS SEEMED TO HAVE BEEN FUELLED BY THE LATE REPORTING HERE OF REMARKS MADE A WEEK OR SO AGO BY A US CONGRESSMAN TO THE EFFECT THAT CITIBANK WAS 'TECHNICALLY INSOLVENT''. HIS REMARKS WERE AT THE TIME QUICKLY REPUDIATED BY THE US AUTHORITIES AND LITTLE ATTENTION HAS BEEN PAID TO THEM ELSEWHERE. WE BELIEVE, THOUGH, THAT, AS BEFORE, THERE MAY ALSO BE AN ORCHESTRATED CAMPAIGN AT WORK. WE ARE CONTINUING TO
INVESTIGATE THIS.
6.
THE RUMOURS SHOWED SIGNS YESTERDAY OF SPREADING TO A FEW OTHER U S OWNED BANKS HERE BUT ALSO CENTRED ON STANDARD CHARTERED BANK (SCB). THE LINE WE HAVE BEEN TAKING IS TO TE 'RUBBISH TI THE RUMOURS AND POINT OUT THAT ALL THE BANKS CONCERNED RE SOUND AND WELL REGULATED. THE PRESSURE ON CITIBANK HAS EASED TODAY BUT THAT ON SCB HAS INTENSIFIED WITH WILD RUMOURS CIRCULATING E.G. THAT THEIR BANK LICENCE HAS BEEN WITHDRAWN IN THE UK. SCB TOO SEEMS WELL ABLE TO COPE WITH THE PROBLEM. WE ARE IN TOUCH WITH THE BANK OF ENGLAND AND FEDERAL RESERVE BANK.
FORD
YYYY
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