NESDAY, FEBRUARY 27, 1985
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HE SAID THEIR CONFIDENTIAL REPORT HAS BEEN A MOST HELPFUL CONTRIBUTION TO OUR THINKING, ALTHOUGH WE ARE NOT IN AGREEMENT WITH ALL OF ITS CONCLUSIONS AND RECOMMENDATIONS.
+ANY NEW LEGISLATION THAT MAY BE PROPOSED (AND I THINK THAT NEW LEGISLATION WILL BE NECESSARY) WILL REFLECT SUCH EXPERIENCE OF OTHER SUPERVISORY SYSTEMS AS WE CAN USEFULLY DRAW UPON, OUR OWN VIEW OF WHAT WOULD BE APPROPRIATE IN THE PARTICULAR CIRCUMSTANCES OF HONG KONG, AND THE FEEDBACK WE OBTAIN FROM LOCAL CONSULTATION.
+1 AM ATTRACTED BY THE CONCEPT THAT SUPERVISION NEEDS TO BE MORE FLEXIBLE AND DISCRETIONARY, PROVIDED THAT THE GOVERNMENT OFFICIALS ARE NOT ENDOWED WITH TOO MUCH UNFETTERED POWER.
+WE ARE THEREFORE EXAMINING THE VARIOUS OPTIONS IN THIS FIELD. THERE WILL BE CLOSE CONSULTATION WITH THE BANKING AND DEPOSIT-TAKING COMPANIES ADVISORY COMMITTEES.
+IN THE MEANTIME, WE ARE MAKING PROGRESS IN OUR INTERNAL CONSIDERATION OF THE MORE TECHNICAL ASPECTS OF SUPERVISION, SUCH AS CAPITAL ADEQUACY TESTS, THE ARITHMETIC OF THE LIQUIDITY REQUIREMENT AND UNBALANCED LENDING. WE HAVE ALREADY MADE PROGRESS TOWARDS THE SUPERVISION ON A WORLDWIDE CONSOLIDATED BASIS OF THOSE LOCALLY-INCORPORATED INSTITUTIONS WHICH HAVE OVERSEAS BRANCHES AND SUBSIDIARIES.
+VISIBLE PROGRESS MAY SEEM SLOW, BUT THESE ARE COMPLEX ISSUES AND WE MUST FIND THE BEST ANSWERS. IN ANY CASE I DO NOT ACCEPT THE PRESUMPTION THAT, JUST BECAUSE WE HAVE NOT INTRODUCED ANY NEW LEGISLATION SINCE 1983, WE HAVE NOT ACHIEVED ANY IMPROVEMENTS IN OUR SUPERVISORY METHODS SINCE THEN. EFFICIENT SUPERVISION IS JUST AS DEPENDENT UPON PROPER ADMINISTRATIVE PROCEDURES AND UPON INFORMAL EXCHANGES. IN THESE AREAS WE CONTINUE TO MAKE QUIET, USEFUL PROGRESS.
SIR JOHN SAID HE WANTED TO MAKE IT QUITE CLEAR THAT THE GOVERNMENT WAS NOT ADVOCATING REGULATION FOR REGULATION'S SAKE.
+OUR AIM IS TO PROMOTE SOUND BUSINESS PRACTICE, TO PROVIDE A MEASURE OF PROTECTION FOR DEPOSITORS AND INVESTORS, AND HENCE TO CONSOLIDATE HONG KONG'S REPUTATION AS A MAJOR FINANCIAL CENTRE.
+ IN THIS AND OTHER AREAS NO GOVERNMENT CAN STAND STILL. THERE MUST BE STEADY IMPROVEMENT WITHOUT SUDDEN SHOCKS AND WITH FULL CONSULTATION.+
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