XN000022-1983-01-05 — Page 3

WEDNESDAY,

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MARY 5, 1983

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VULNERABILITY OF REGISTERED DTC'S GREATLY REDUCED *****

SHORT-TERM DEPOSITS OF REGISTERED DEPOSIT-TAKING COMPANIES HAVE BEEN ENORMOUSLY REDUCED, THE FINANCIAL SECRETARY, THE HON JOHN BREMRIDGE, SAID IN THE LEGISLATIVE COUNCIL TODAY.

DEPOSITS OF DTC'S WITHOUT BANK AFFILIATION A MONTH AGO STOOD AT $400 MILLION, DOWN FROM $4 BILLION IN MID-1981, AND THE DOWNWARD MOVEMENT WOULD CLEARLY CONTINUE, MR BREMRIDGE SAID.

THIS +SEA-CHANGE+ HAD CONSIDERABLY REDUCED THE VULNERABILITY OF REGISTERED DTC'S TO POSSIBLE PUBLIC CONCERN OVER SHORT-TERM DEPOSITS WITH THEM, HE STATED.

MR BREMRIDGE WAS REPLYING TO THE HON PETER C. WONG, WHO HAD ASKED THE GOVERNMENT TO GIVE AN UP-TO-DATE ASSESSMENT OF THE THREE- TIER MONETARY SYSTEM INTRODUCED IN JULY 1981 AND TO SAY WHETHER IT HAD ACHIEVED ITS OBJECTIVES.

MR BREMRIDGE EXPLAINED THAT AS THE SYSTEM WAS STILL IN TRANSITION, IT WAS PREMATURE TO ATTEMPT A FULL ASSESSMENT.

+MOREOVER AT THIS PARTICULAR JUNCTURE IT WOULD BE VERY IMPRUDENT FOR ME TO RISK BEING MISINTERPRETED, WHICH COULD CONSEQUENTLY PREJUDICE THE COMMENDABLE EFFORTS WHICH THE WHOLE FINANCIAL SECTOR IS AT PRESENT MAKING TO RESOLVE ITS OWN PROBLEMS AND THOSE OF ITS CUSTOMERS, ESPECIALLY IN THE PROPERTY SECTOR, + HE SAID.

BUT HE REMINDED MR WONG THAT THE RESTRUCTURING OF THE SYSTEM, AS EXPLAINED BY THE PREVIOUS FINANCIAL SECRETARY, SOUGHT TO OBVIATE THE LIKELIHOOD OF A DANGEROUSLY DESTABILISING SITUATION DEVELOPING BETWEEN DIFFERENT GROUPS OF INSTITUTIONS WITHIN THE MONETARY SECTOR+.

IN THIS CONTEXT, MR BREMRIDGE SAID, HE WAS PLEASED WITH THE ENORMOUS REDUCTION OF SHORT-TERM DEPOSITS WITH REGISTERED DTC'S.

HE ALSO DISCLOSED THAT LICENCES HAD BEEN GRANTED TO 22 COMPANIES WHICH HAD APPLIED FOR THE NEW STATUS CREATED LAST YEAR OF LICENSED DEPOSIT-TAKING COMPANY.

THESE COMPANIES, HE SAID, HAD ALL MET THE EXACTING CRITERIA SET DOWN.

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