FRIDAY, SEPTEMBER 11, 1981
+ IT IS BECAUSE THE PRESENT LEVEL OF INTEREST RATES IS UNDOUBTEDLY HAVING PAINFUL CONSEQUENCES FOR IMPORTANT SECTORS OF OUR ECONOMY AND THE IR LABOUR FORCE THAT I AM LOATHE TO SEE FURTHER INCREASES, EVEN THOUGH IT MUST BE ACCEPTED THAT THE SITUATION IN TERMS SIMPLY OF INFLATION MIGHT DEMAND THEM. THE BALANCE IS VERY FINE.
+THE WISH TO SEE THE RATE OF CREDIT CREATION RESTRAINED WITHOUT FURTHER INCREASES IN INTEREST RATES OR IN TAXATION, WHICH WOULD BE DIFFICULT TO JUSTIFY AGAINST OUR BUDGETARY SURPLUSES, HAS LED TO CALLS FOR OTHER METHODS OF RESTRAINT TO BE ADOPTED. I WISH THAT THIS COURSE WAS AS SIMPLE AS SOME OF GOVERNMENT'S CRITICS IMPLY.
MR BREMRIDGE SAID IT WAS IMPORTANT TO BE SURE THAT ANY CASE FOR GOVERNMENT INTERVENTION IS BASED ON AN ACCURATE INTERPRETATION OF THE RELEVANT DATA.
+GIVEN THAT THERE IS EVERY REASON FOR GREAT CAUTION, IF WE CAN CONTRIVE A SIMPLE AND EFFECTIVE SYSTEM OF CONTROLLING CREDIT CREATION IN HONG KONG WHICH DOES NOT HAVE UNDESIRABLE AND UNAVOIDABLE SIDE-EFFECTS, WE WILL CONSIDER ITS INTRODUCTION TO THE LEGISLATIVE PROCESS. BUT I MUST STRONGLY EMPHASISE THREE CAVEATS.
+FIRSTLY, WE HAVE TO BE CERTAIN THAT WE ARE CORRECTLY INTERPRETING TOTALLY RELEVANT AND MEANINGFUL DATA.
+SECONDLY, WE HAVE TO BE CONFIDENT THAT THE BENEFITS TO BE GAINED FROM ADOPTING SUCH A SYSTEM WILL BE WORTHWHILE IN THE LIGHT OF ANY LONG-TERM DAMAGE WHICH MIGHT BE DONE TO THE MARKETS' VIEW OF HONG KONG AS A FINANCIAL CENTRE BASED ON STABLE POLICIES, AND NOT PRONE TO SUDDEN CHANGES OF COURSE WHETHER IN FISCAL OR MONETARY OR ECONOMIC MATTERS.
+THIRDLY I WOULD MUCH PREFER TO SEE SELF CONTROL AND A DEGREE OF RESPONSIBILITY EXERCISED BY THE WHOLE FINANCIAL SECTOR WITHOUT GOVERNMENT INTERVENTION.
MR BREMRIDGE SAID THE MAIN ECONOMIC PROBLEMS WERE THE NEED TO ABATE INFLATION, THE NEED TO PROPERLY CONTROL PUBLIC EXPENDITURE IN THE FACT OF CLEAR SOCIAL NEED AND CONSIDERABLE SURPLUSES AND RESERVES, AND THIRDLY THAT PROTECTION ISM WAS NOT LIKELY TO DECREASE IN THE MAJOR MARKETS.
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