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Despite the fact that the BCC Group was based in Luxembourg, its banking operations were spread throughout the world. and it was not possible for the banking author.ties in Luxembourg to supervise the activities of the Group as a whole. A "College of Supervisors" was therefore set up in 1988 composed of banking superv:.sors from the UK, Luxembourg, Spain and Switzerland to coordinate supervision of those of the BCC Group for which they had responsibility. The College met. for the first time in July 1988 and other supervisory authorities joined subsequently. Hong Kong Banking Ccmmission became a member in July
1989.
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A key concern of the College was to achieve a more coherent structure for the BCC Group which would enable the supervisior of the Group to be further improved. scheme for a complete restructuring of the Group began to be discussed by the College from June 1990 onwards. This would have involved the establishment of three independent barking operations, each owned as to 77% by the Government of Abu Dhabi. The three sister banks would have been incorporated in the UK, Abu Dhabi and Hong Kong and would have been run, and supervised, as separate operations.
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My office had participated in the discussions on the restructuring and had indicated its approval, in principle, of the proposals as they affected BCCHX. While the restructuring proposals were being finalised, the main concern of my office was to ensure that adequate provisions vere made by BCCHK for bad and doubtful debts on its balance sheet: in other words, that its assets were realistically valued so that it had a sound platform for the future. My office had kept closely in touch with the auditors,
Price Waterhouse, who had conducted a thorough examination of 3CCHK's loan book for the purposes of the 1990 audit. This had required the bank to set aside $565mn fo: bad and doubtful debts in the 1990 accounts. Consequently, the bank recorded a loss of $431mn for 1990.
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