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WEDNESDAY, DECEMBER 3, 1980
OBJECTIVES OF ASSOCIATION OF BANKS BILL
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A BILL WHICH SEEKS TO INCORPORATE A NEW ASSOCIATION TO REPLACE THE EXCHANGE BANKS' ASSOCIATION AND TO INCLUDE EVERY REGISTERED BANK AS A MEMBER WAS INTRODUCED INTO THE LEGISLATIVE COUNCIL TODAY.
MOVING THE SECOND READING OF THE HONG KONG ASSOCIATION OF BANKS BILL 1980, THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE SAID THE PROPOSED LEGISLATION WAS PUT FORWARD TO MEET FIVE DISTINCT OBJECTIVES WHICH HE OUTLINED AS FOLLOWS:
* TO GIVE ALL BANKS LICENSED IN HONG KONG, INCLUDING THOSE
INCORPORATED OUTSIDE HONG KONG, A CLEARLY DEF INED OPPORTUNITY TO HAVE THEIR VOICES HEARD IN THE RUNNING OF THE IR TRADE ASSOCIATION=
* TO ENSURE THAT THE GOVERNMENT IS INVOLVED IN THE PROCESS OF
KEEPING THE ASSOCIATION'S CONSTITUTION UP TO DATE=
* TO ENSURE THAT THE GOVERNMENT, OR RATHER THE FINANCIAL
SECRETARY, IS DIRECTLY INVOLVED IN THE FORMULATION OF RULES MADE BY THE ASSOCIATION AND IN THE ENFORCEMENT OF THOSE RULES-
* TO PROVIDE THAT THE CHAIRMANSHIP OF THE ASSOCIATION WILL
BE HELD BY TWO NOTE-ISSUING BANKS, ALTERNATING AT INTERVALS OF TWO YEARS- AND
* TO REQUIRE BY A CONDITION ATTACHED TO ITS LICENCE THAT
EVERY BANK SHALL BE A MEMBER OF THE ASSOCIATION.
THE NEW ASSOCIATION WILL ALSO STRENGTHEN THE OPERATION OF INTEREST RATE AGREEMENT FOR TWO REASONS, NAMELY THE AGREEMENT PROTECTS THE SMALLER LOCALLY-OWNED AND INCORPORATED BANKS FROM A DEGREE OF COMPETITION WHICH THEY ARE NOT EQUIPPED TO MEET, AND THE AGREEMENT FORMS PART OF THE SPECTRUM OF INTEREST RATES IN HONG KONG OVER WHICH THE FINANCIAL SECRETARY CAN AT PRESENT EXERCISE ANY INFLUENCE.
SIR PHILIP SAID IN THE PRESENT DAY CIRCUMSTANCES, IT WAS IMPORTANT THAT, AT SOME POINT IN THE PROCESS OF DETERMINING INTEREST RATES, THE WIDER PUBLIC INTEREST WAS TAKEN INTO ACCOUNT, AS WELL AS NARROWER MARKET FACTORS.
UNDER THE PROPOSED LEGISLATION, A COMMITTEE WILL BE ESTABLISHED RESPONSIBLE FOR THE MANAGEMENT OF THE ASSOCIATION. IT WILL HAVE 12 MEMBERS - THREE CONTINUING ONES (THE TWO NOTE-ISSUING BANKS AND THE BANK OF CHINA) AND NINE ELECTED MEMBERS. A CONSULTATIVE COUNCIL WILL ALSO BE SET UP TO GIVE ALL MEMBERS A FORUM IN WHICH THEY CAN CONTRIBUTE TO THE MAKING OF THE POLICIES TO BE PURSUED BY THE ASSOCIATION.
IN ADDITION
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