11
FRIDAY, JULY 19, 1991
BANKING COMMISSIONER ON BCCHK
* *.
STATEMENT A
MADE BY
THE THE FOLLOWING IS BANKING, MR DAVID CARSE, AT THE FINANCE COMMITTEE OF COUNCIL TODAY (FRIDAY):
DECISION
TO
I HAVE BEEN ASKED TO EXPLAIN MY OPEN ON SATURDAY, JULY 6 AND MY SUBSEQUENT DECISION CLOSE ITS DOORS ON THE FOLLOWING MONDAY.
THE TIMETABLE OF EVENTS
COMMISSIONER
ог
THE LEGISLATIVE
ΤΟ
ALLOW BCCHK TO ORDER 1T TO
BCC GROUP
I FIRST BECAME AWARE OF THE PROBLEMS CONCERNING THE
BANK DURING THE DAYS PRECEDING FRIDAY, JULY 5. 1 WAS ADVISED THAT THE
FRAUD IN TWO OF SUSPECTED
MAJOR OF ENGLAND HAD RECEIVED A REPORT
NOT DO
OPERATE IN HONG BANKING SUBSIDIARIES OF THE BCC GROUP THAT KONG.
OF ENGLAND DELAYED FOR IT WAS
INITIALLY, IT APPEARED THAT ANY ACTION BY THE BANK AND OTHER SUPERVISORS IN RESPECT OF THIS REPORT WOULD BE A WEEK OR MORE, THIS TIMETABLE SHORTENED DURING THE WEEK, BUT
5 JULY
THAT IT WAS KNOWN NOT UNTIL 6 PM HONG KONG TIME ON FRIDAY,
BE TAKEN WAS THAT AN ANNOUNCEMENT OF THE PROBLEMS AND THE ACTION TO
HAD TO TO BE MADE AT 8 PM HONG KONG TIME. THIS MEANT THAT A DECISION
TO OPEN BE TAKEN AT THAT POINT AS TO WHETHER BCCHK SHOULD BE ALLOWED ON SATURDAY MORNING.
THE BACKGROUND TO THE DECISION
AT THE TIME, THE FACTS AVAILABLE TO
ME ABOUT
BCCHK
WERE AS
FOLLOWS:
(T)
ITS 1990 ACCOUNTS HAD JUST LARGE LOSS DUE TO INCREASED PROVISIONS;
BEEN
PUBLISHED SHOWING
A
(11)
MY OFFICE HAD BEEN INVOLVED BANK AND ITS AUDITORS REGARDING WAS AWARE OF THE BACKGROUND WITH THE AUDITORS PRIOR TO FRIDAY, JULY 5, I THAT
REGARDED THEY
IN
DISCUSSIONS WITHI
THE
THESE ΤΟ THEM. IN DISCUSSIONS I CONFIRMED THE BANK AS CONSERVATIVELY
PROVISIONS
AND
(IV)
PROVISIONED;
DESPITI
HAVING TO
THESE MAKE
PROVISIONS,
BE TO
BCCHK SOLVENT.
WAS MY
SHOWN IN THE 1990 ANNUAL ACCOUNTS OFFICE WAS NOT AWARE OF ANY EVENTS AFTER THE 1990 YEAR- END WHICH ALTERED THAT POSITION;
BANK
IN
REQUIREMENTS THE PRUDENTIAL
THOSE PARTICULAR
IN THE RELATING
TO
THE
MET BANKING ORDINANCE, CAPITAL ADEQUACY AND LIQUIDITY;
/(V)