124
12
FRIDAY, JULY 19, 1991
(V)
THE ULTIMATE MAJORITY
SHAREHOLDERS
OF
THE BANK HAD BANK FOR THE HAD INJECTED $125
PECENTLY DECLARED THEIR SUPPORT FOR THE
AND PURPOSES OF THE 1990 ACCOUNTS MILLION OF CAPITAL IN THE FORM OF A SUBORDINATED LOAN;
THE
(VI)
THE BANK HAD SUBSTANTIALLY REDUCED ITS EXPOSURE TO REST OF THE BCC GROUP IN CONSULTATION WITH MY OFFICE;
THERE WAS NO EVIDENCE THAT BOCHR WAS IMPLICATED IN SUSPECTED FRAUD IN THE OTHER PARTS OF THE BCC GROUP.
THE
IN THE LIGHT OF THIS, AND BEARING 1N MIND THE SUBSTANTIAL'
ANXIOUS DEPOSITS WHICH BECHK HAD TAKEN FROM NON-BANK CUSTOMERS, I WAS
WAS AWARE OF THE TO KEFF THE BANK OPEN IF AT ALL POSSIBLE. 1
FACT
BANK WERE To CLOSE THAT IF THE
ON SATURDAY, I'T WOULD BE VERY SERIOUS RUN ON DIFFICULT FOR IT TO BE RE-OPENED WITHOUT PROVOKING A DEPOSITS.
ז
RELIEVE THAT IF I HAD ACTED TO CLOSE THE BANK ON SATURDAY, LEGAL ACTION, FOR I WOULD HAVE BEEN OPEN TO CRITICISY, AND POSSIBLE HAVING ACTED TO HASTILY.
THROUGH MY ABU DHABI SITUATION BANK
ME, ALLOWING THE BANK TO REMAIN OPEN ALSO ENABLED REPRESENTATIVE, TO HOLD DISCUSSIONS WITH THE GOVERNMENT OF
THE CHANGED TO ENSURE THAT IT STILL STOOD BEHIND BUCHK IN AND TO TRY TO HAVE THAT SUPPORT STRENGTHENED. TO HAVE CLOSED THE ON SATURDAY WOULD HAVE JEOPARDISED THIS ATTEMPT.
NORMALLY ON SATURDAY SOME DAY DID FROM THE BANK THEREFORE
FROM
TO TRADE BCCHK DID MANAGE
RELATIVELY LARGER THAN THOUGH SOME
NORMAL WITHDRAWALS WERE MADE BRANCHES. THE DECISION TO ALLOW THE BANK TO REMAIN OPEN THAT NOT THEREFORE RESULT IN A MAJOR LOSS OF LIQUID ASSETS AND THE POSITION OF DEPOSITORS AS
WHOLE WAS NOT MATERIALLY WORSENED.
ABILITY
ITS
THAT THE BANK'S DURING THE WEEKEND, HOWEVER, IT BECAME CLEAR
то
BUSINESS CONDUCT
BY COULD BE
THE AFFECTED THE BCC GROUP. A UNCERTAINTIES SURROUNDING THE REST OF
PARTICULAR INTERNATIONAL 'S DECISION TO BLOCK INSTANCE OF THIS WAS VISA
BCCHK BANK ON MONDAY CREDIT CARDS. THE POSSIBILITY OF A RUN ON THE
COULD
LIGHT THE
OF NOT BE RULED OUT, PARTICULARLY
GROWING PUBLICITY GENERAL MANAGER ABOUT THE PROBLE'S OF THE REST OF THE BOC GROUP, THE OF THE BANK AGRFLD WITH THIS VIEW.
IN
GOVERNMENT OF ABU ON SUNDAY EVENING, I WAS INFORMED THAT THE
STATEMENT OF SUPPORT DHABI HILE UNABLE TO PROVIDE THE CLEAR WRITTEN
ISOLATED FOR THE BANK WHICH I HAD REQUESTED. THIS LEFT THE BANK IN AN
THAT POINT POSITION AND AT
FELT
BE THAT IT WOULD
FAIRER TO SUFFERED SERIOUS DEPOSITORS IN GENERAL TO DRAW THE LINE BEFORE BCCHK
AT THE EXPENSE CASH WITHDRAWALS WHICH WOULD BENEFIT SOME DEPOSITORS
BUSINESS OF OTHERS. ACCORDINGLY, I ORDERED THE BANK NOT TO ON THE MORNING OF MONDAY, JULY 8.
OPEN FOR
/SINCE THAT