CONFIDENTIAL
Liquidity Adjustment Facility
2
HKG intends to consult the Hong Kong Association of Banks (HKAB) and other interested parties on a proposal to introduce a Liquidity Adjustment Facility (LAF) in Hong
Kong. The proposal is described in the attached paper to
be used for consultation. The Exchange Fund Advisory
Committee has already been consulted on a confidential
basis and has given its support. The proposal has regrettably been leaked to the press. But public response, particularly from the financial sector, has fortunately
been overwhelmingly favourable.
2.
intention.
The Chinese side is invited to note this HKG
After receiving comments from interested
parties in the next month or so, HKG would finalize the
practical details of the proposal, including the necessary
documentation for taking security from banks
from banks wishing to The proposal would then be implemented.
borrow under LAF.
14 February 1992
office of the Exchange Fund
CONFIDENTIAL
P.2
1