RESTRICTED
135124
MDLIAN 9901
RESTRICTED
FM UKDEL IMF/IBRD WASHINGTON
TO PRIORITY FCO
TELNO 405
OF 0423OOZ DECEMBER 1992
AND TO PRIORITY ODA, HM TREASURY, BANK OF ENGLAND,
AND TO PRIORITY HONG KONG, UKREP JLG HONG KONG, PEKING
FCO FOR TEBBIT
(ERD) ODA FOR POWER (IFID), HM TREASURY FOR PICKERING (AND FOR PERETZ), BANK OF ENGLAND FOR BULLOCH
RE OUR TELNO 369
WORLD BANK BORROWING IN HONG KONG
1.
WORLD BANK MANAGEMENT HAVE REJECTED OUR REQUEST THAT
IBRD SHOULD BE PREPARED TO ISSUE BONDS IN HONG KONG WITH A
MATURITY AFTER 1997.
2.
SUCH
STERN (MANAGING DIRECTOR) CONTINUES TO ARGUE THAT
ISSUES WOULD CONFLICT WITH THE BANK'S RULE THAT IT
DOES NOT BORROW FROM A MEMBER WHICH IS BORROWING FROM THE
BANK. STERN ACKNOWLEDGES THAT HONG KONG MAY BE VIEWED
INDEPENDENTLY OF CHINA IN RESPECT OF MONETARY AND EXCHANGE
ARRANGEMENTS BUT ARGUES THAT WHAT MATTERS IS THAT THE BANK
IS REQUIRED TO OBTAIN THE APPROVAL OF THE MEMBER LN WHOSE MARKETS IT IS BORROWING (I.E. CHINA AFTER 1997).
3.
OUR APPROACH TO BANK MANAGEMENT WAS FULLY SUPPORTED
BY A NOTE FROM WANG (EXECUTIVE DIRECTOR FOR CHINA).
COPY OF STERN'S NOTE BY FAX TO FCO (TEBBIT), ODA (POWER) AND HONG KONG (CHAN). WE HAVE GIVEN A COPY TO WANG.
STANTON
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