XN000022-1985-04-24 — Page 6

WEDNESDAY, APRIL 24, 1985

+I THINK THAT THIS CONCEPT WHICH HAS BEEN ACCEPTED OVER THE YEARS WOULD GIVE ANY COMMISSIONER THE ESSENTIAL BACKBONE TO HIS POWERS, HE SAID.

AS FOR THE GENERALITY OF THE ORDINANCE, MR FELL SAID THAT WHILE EVERY EVENTUALITY COULD NOT BE FORESEEN. HE THOUGHT THERE WAS A NEED FOR A PROVISION TO GIVE FLEXIBILITY BY PERMITTING ORDERS TO BE MADE, AS WELL AS SOME SORT OF WAIVER PROVISION TO ENSURE THAT WE HAVE THE ABILITY TO ACT QUICKLY IN PROBLEM CASES.+

HE SAID: +ON ONE SPECIFIC AREA, I WOULD EXPECT THE NEW LEGISLATION TO REDEFINE THE RELATIONSHIP BETWEEN THE COMMISSIONER AND THE AUDITOR. THE FORM OF THIS WILL DEPEND ON THE OUTCOME OF TALKS WITH BANKS AND WITH THE SOCIETY OF ACCOUNTANTS WHICH I CAN SAY THIS AFTERNOON ARE PROVING MOST FRUITFUL.+

+AT THIS STAGE I SEE NO INSUPERABLE PROBLEM IN PROVIDING FOR THIS SORT OF RELATIONSHIP, HE ADDED.

HE WENT ON: ONE MATTER WHICH NEEDS UNIFORM TREATMENT IS INNER RESERVES, A CONCEPT WHICH I DO NOT SEE BEING CHANGED IN THE FORESEEABLE FUTURE AND WHICH DOES ALLOW ORDERLY ADJUSTMENT WITHOUT TOO FIERCE A SPOTLIGHT ON PERFORMANCE. BUT AS WE CONTINUE THE CONCEPT OF INNER RESERVES, AT LEAST, TRENDS MUST BE MADE CLEARER TO THE READER OF THE REPORT AND ACCOUNTS.+

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IT WAS IN THIS CONTEXT THAT THE DEPOSITOR DID NOT KNOW THE FULL PICTURE - THAT THE ARGUMENT HAD COME FOR A DEPOSIT INSURANCE SCHEME.

MR FELL SAID THE POINTS HE HAD RAISED WOULD GO A LONG WAY TO COPING WITH PROBLEMS PERCEIVED IN PRUDENTIAL SUPERVISION IN HONG KONG AND WOULD +GIVE US A BETTER MECHANISM TO DEAL PROMPTLY WITH DIFFICULT CASES AS THEY ARISE FROM TIME TO TIME.+

HE SAID THE JOB WAS TO WORK WITH THE BANKS FOR THEIR GOOD AND FOR THE GOOD OF THE COMMUNITY, RATHER THAN TO DRAGOON THEM.

+THAT IS THE WAY WE WILL APPROACH OUR NEWLY DEFINED RESPONSIBILITIES, HE SAID.

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