WEDNESDAY, NOVEMBER 27, 1985
43
STRENGTHENED PRUDENTIAL SUPERVISION WELCOMED
****
THE FINANCIAL SECTOR FULLY SUPPORTS THE MAJOR OBJECTIVES OF THE PROPOSED REFORMS STRENGTHENING THE PRUDENTIAL SUPERVISION OF FINANCIAL INSTITUTIONS AND MARKETS, THE HON DAVID K.P. LI SAID TODAY (WEDNESDAY).
SPEAKING AT THE ANNUAL POLICY DEBATE, HE SAID THAT IT WAS ONE OF THE LESSONS LEARNED FROM EVENTS OF THE PAST FEW YEARS THAT THERE WAS A NEED TO IMPROVE THIS PRUDENTIAL SUPERVISION.
HE NOTED THAT THE MAJOR OBJECTIVES OF THE PROPOSED REFORMS WERE NAMELY TO PROTECT INDIVIDUAL AND CORPORATE DEPOSITORS; TO PROTECT AND PROMOTE THE INTEGRITY OF THE BANK ING SYSTEM OPERATING IN AND FROM HONG KONG TO ASSIST CONSOLIDATED SUPERVISION BY OTHER JURISDICTIONS IN THE INTERESTS OF SAFE INTERNATIONAL BANK ING AND TO PROTECT THE GOOD NAME OF HONG KONG AS A REPUTABLE FINANCIAL CENTRE.
THE FINANCIAL SECTOR, HE ADDED. ALSO RECOGNISED THAT SUCH REFORM PROPOSALS WERE IN ITS BEST INTERESTS THOUGH IT MIGHT HAVE RESERVATIONS ABOUT THE WAY THE REFORMS WERE TO BE IMPLEMENTED AND THE SUPPLEMENTARY MEASURES THAT MIGHT ASSIST THE PROCESS.
HOWEVER, HE WARNED THAT OVER-REGULATION AND OVER-LEGISLATION WOULD DISCOURAGE PRIVATE ENTERPRISE AND INITIATIVE, TO THE PERMANENT DETRIMENT OF HONG KONG'S FINANCIAL SERVICES INDUSTRY.
POINTING OUT THAT REFORM PROPOSALS WOULD REQUIRE STRICTER SUPERVISION AND THE PRESSURE ON THE STAFF OF THE BANK ING COMMISSIONER'S OFFICE WOULD BE GREATER THAN EVER, MR LI CALLED FOR THE RECRUITMENT OF MORE STAFF WITH A HIGH DEGREE OF BANKING KNOWLEDGE AND EXPERIENCE TO COPE WITH THE MOUNTING WORKLOAD.
IN THE SUGGESTED REFORM PROPOSALS, THE BANKING COMMISSIONER OULD BE GIVEN MORE DISCRETIONARY POWERS TO DEAL WITH INDIVIDUAL CASES OF SUSPECTED MISMANAGEMENT OR FRAUD.
TOGETHER WITH HIS EXISTING POWERS, THE NEW PROPOSALS WOULD ME THE FUTURE COMMISSIONER OF BANK ING A VERY POWERFUL PERSON, MR LI SAID.
+HONG KONG IS VERY FORTUNATE THAT IN OUR PRESENT COMMISSIONER. WE HAVE A PERSON OF EXCEPTIONAL EXPERIENCE AND INTEGRITY.
*BUT IN THE CHALLENGING YEARS AHEAD, ADEQUATE SAFEGUARDS MUST BE PROVIDED AGAINST ANY POSSIBLE ABUSE OF POWER, HE SAID.
CONTINUING, MR LI SAID THE BANKING COMMUNITY THOUGHT THEY
C JLD LIVE WITH THE SUGGESTED LIQUIDITY RATIO, BUT ONLY IF THE LIQUIDITY OF THE SYSTEM WAS GUARANTEED BY A LENDER C. LAST RESORT IN SOME ACCEPTABLE FORM.