XN000022-1986-05-19 — Page 2

MONDAY, MAY 19, 1986

DTC SECTOR MUCH HEALTHIER WITH SUPERVISION

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HONG KONG HAS NOW A HEALTHY DEPOSIT-TAKING COMPANIES SECTOR WITH A SUPERVISORY SYSTEM WHICH SHOULD PROMOTE AND MAINTAIN THAT HEALTH, THE FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, SAID TODAY (MONDAY).

SPEAKING AT A LUNCHEON MEETING OF THE DEPOSIT-TAKING COMPANIES ASSOCIATION, SIR JOHN SAID THE DTC SECTOR WAS ALMOST A DIFFERENT INDUSTRY FROM WHAT IT WAS WHEN IT BEGAN TO EMERGE FROM THE JUNGLE.

AND THE NEW BANKING LEGISLATION EMBRACING BOTH BANKS AND DTC'S WOULD COMPLEMENT OUR APPROACH TO THE SUPERVISION OF DEPOSIT-TAKING COMPANIES, HE SAID.

HOWEVER, HE NOTED THAT WHILE WE PONTIFICATED ABOUT HONG KONG'S POSITION AS A FINANCIAL CENTRE, OTHER FINANCIAL CENTRES AND INVESTORS WOULD JUDGE US BY OUR PERFORMANCE RATHER THAN BY TALK.

HE SAID: +WHAT WE CAN CLAIM IS THAT SOMETHING APPROACHING A QUIET REVOLUTION HAS TAKEN PLACE IN THE DTC SECTOR.

+AND THE REVOLUTION HAS BEEN ACHIEVED WITH MINIMUM OR NIL DAMAGE TO THE DEPOSITOR EXCEPT FOR THE HANDFUL OF CASES WHICH ARE NOW A MATTER FOR THE COURTS.+

SIR JOHN ADDED THAT NONE OF US WOULD CLAIM THAT WE WERE ESTABLISHING A PERFECT SYSTEM WHICH WOULD NEVER AGAIN SEE A FAILURE.

+ IT CANNOT GUARANTEE INTEGRITY. BUT WHAT WE CAN CLAIM IS THAT MY SUCCESSOR AND MORE IMPORTANT, HONG KONG HAS NOW A HEALTHY DTC SECTOR WITH A SUPERVISORY SYSTEM WHICH SHOULD PROMOTE AND MAINTAIN THAT HEALTH, HE SAID.

SIR JOHN SAID IN JUNE 1981 THERE WERE 346 REGISTERED DTC'S, AS COMPARED WITH THE PRESENT 279.

+ IN THE LAST YEAR ALONE 44 DTC'S WERE TAKEN OFF THE REGISTER,+ HE NOTED.

HE SAID ON THE PLUS SIDE, IN JUNE 1981, THERE WERE NO LICENSED DTC'S WITH THEIR BIGGER CAPITAL BASE.

+SINCE THEN 36 DEPOSIT-TAKING COMPANIES HAVE SUFFICIENTLY DEVELOPED THEIR CAPITAL AND BUSINESS SIZE TO ENABLE THEIR BEING GIVEN LICENSED STATUS.+

IN ADDITION TO THIS GRADUATION PROCESS, SIR JOHN SAID THE GOVERNMENT WELCOMED NEW ENTRANTS TO THE INDUSTRY.

/HE SAID: