XN000022-1988-06-30 — Page 6

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THURSDAY, JUNE 30,

1988

"THESE MEETINGS WERE USUALLY INITIATED BY THE COMMISSIONER'S OFFICE, AND THE MOST FREQUENT SUBJECT DISCUSSED RELATED TO THE APPROPRIATE LEVEL OF PROVISIONS AGAINST DIMINUTION IN VALUE OF

INSTITUTIONS' ASSETS,

H HE SAID.

THE REPORT ALSO NOTED THE IMPORTANCE OF THE COMMISSIONER AND HIS STAFF TO MAINTAIN CLOSE CONTACT WITH OVERSEAS BANKING SUPERVISORY AUTHORITIES, WITH REGARD BOTH ΤΟ THE AFFAIRS OF INDIVIDUAL INSTITUTIONS AND TO THE DEVELOPMENT OF POLICY.

ONE SECTION OF THE REPORT DISCUSSED THE STOCK MARKET COLLAPSE IN OCTOBER 1987, AND WHAT THE COMMISSIONER'S OFFICE DID DURING THAT DIFFICULT TIME.

THE REPORT NOTED THAT BANKS IN FACT SHOWED A CONSIDERABLE SENSE OF COMMUNITY RESPONSIBILITY IN WHAT WERE FOR MOST UNPRECEDENTED CIRCUMSTANCES.

ALTHOUGH A NUMBER OF INSTITUTIONS WERE OVER-EXPOSED ΤΟ MARGIN CUSTOMERS, THE SUBSEQUENT PROBLEMS WERE ALL SUCCESSFULLY RESOLVED.

THE REPORT IN ONE OF ITS SEVEN ANNEXES PROVIDES A DESCRIPTION OF THE DEVELOPMENTS IN THE BANKING INDUSTRY IN 1987. IT NOTED THAT AT THE END OF 1987 THERE WERE 155 LICENSED BANKS; SIX NEW BANKING LICENCES WERE GRANTED DURING THE YEAR.

OF THE 155 BANKS, 120 WERE INCORPORATED OVERSEAS, REPRESENTING 25 OVERSEAS COUNTRIES, INCLUDING NEW ZEALAND AND NORWAY FOR THE FIRST TIME. THE NUMBER OF DEPOSIT-TAKING COMPANIES AMOUNTED TO 267.

OF

THE REPORT NOTED THAT, DURING THE YEAR, GENERALLY LOW LEVEL INTEREST RATES AND THE BUOYANT ECONOMY BOOSTED LOAN DEMAND, AND THAT MOST INSTITUTIONS REPORTED GOOD RESULTS.

AT THE END OF 1987, MORE THAN 65,000 PERSONS WERE EMPLOYED IN THE BANKING SECTOR, AN INCREASE OF NEARLY 3,000 OR FIVE PER CENT OVER 1986.

THE REPORT ALSO DISCUSSED SOME SUPERVISORY ISSUES, INCLUDING THE THREE-TIER SYSTEM, CONSOLIDATED SUPERVISION, THE BASLE COMMITTEE CAPITAL ADEQUACY PROPOSALS, AND COUNTRY DEBT PROVISIONING.

COPIES OF THE REPORT ARE ON SALE AT THE GOVERNMENT PUBLICATIONS SALES CENTRE AT CONNAUGHT PLACE, CENTRAL AT $15 EACH.

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