XN000022-1991-03-06 — Page 43

42

WEDNESDAY, MARCH 6, 1991

SWAP

"AT PRESENT THE MTRC IS PARTY TO HK$11.5 BILLION EQUIVALENT AND SIMILAR HEDGING CONTRACTS. WERE THE CORPORATION

IMMEDIATE

CONSEQUENCE

OF

ΤΟ

AN

NOT

AGREEMENTS, THESE

THE HONOUR

WOULD BE INCREASE OF EXPOSURE TO FLUCTUATING EXCHANGE RATES AND INTEREST RATES.

"THE GREATER CONSEQUENCE WOULD RE THE DAMAGE TO RELATIONSHIPS WITH INSTITUTIONS. WHICH ARE OR MIGHT BECOME SWAP COUNTER-PARTIES. ALSO OF CONCERN IS THE POSSIBILITY OF INSTITUTIONS REFUSING TO SWAP TRANSACTIONS WHICH ARE FAVOURABLE TO THE CORPORATION.

DIFFICULTIES

HONOUR

AND

"FURTHERMORE, THE CORPORATION WOULD BE FACED WITH SERIOUS

BANKS OVER ITS FUTURE FUNDING REQUIREMENTS BECAUSE

PREPARED THE CORPORATION ITSELF HAVE INDICATED THAT THEY WOULD NOT BE TO ENTER INTO ANY FURTHER HEDGING TRANSACTIONS UNTIL THE POSITION CLARIFIED, HE ADDED.

IS

LORDS

"IN

ORDER TO AVOID ANY OF THESE DAMAGING CONSEQUENCES AND то ANY DISPEL

DOUBTS ABOUT THE STATUS OF TRANSACTIONS ALREADY ENTERED INTO BY THE CORPORATION WHICH MIGHT BE AFFECTED BY THE HOUSE OF DECISION, THE BILL SEEKS TO EMPOWER THE CORPORATION TO ENTER INTO AGREEMENT THAT COULD BE ENTERED INTO BY A NATURAL PERSON," SIR SAID.

ANY

PIERS

"THE NEW POWER HAS TO BE GRANTED WITH RETROSPECTIVE EFFECT AND VALIDATE BE CAST IN WIDE TERMS TO ENSURE THAT, IF NECESSARY, IT WOULD ALL OF THE MANY TYPES OF HEDGING TRANSACTIONS WHICH ALREADY HAVE

BY ENTERED INTO

CORPORATION AND THOSE TO RECOURSE IN THE FUTURE, HE SAID.

BY

THE

TI

WHICH

IT MAY

BEEN HAVE

THE FINANCIAL SECRETARY SAID IN RELATION TO FUTURE TRANSACTIONS THE CORPORATION, THE POWER WAS SUBJECT TO THE EXISTING LIMITATION PROVIDED

THE ORDINANCE THAT THE GOVERNOR IN COUNCIL MIGHT GIVE DIRECTIONS TO THE CORPORATION.

BY

"WERE THE NEED ΤΟ ARISE, THE GOVERNOR IN COUNCIL WOULD, BE ABLE TO ENSURE THAT THE CORPORATION DID NOT ENTER

WHICH WERE CONSIDERED TO BE TOO RISKY OR OTHERWISE

THEREFORE, TRANSACTIONS INAPPROPRIATE.

"BUT,

INTO

APPOINTED BY

UNLIKELY

ADHERED

то

AS THE TRO, UNDER ITS BOARD OF DIRECTORS THE GOVERNOR AND WITH ITS PROFESSIONAL MANAGEMENT, HAS ALWAYS

MOST FO A POLICY OF RISK AVOIDANCE, THIS SITUATION 18 DCCUR," HE SAID.

SIR

PIERS NOTED

THAT THE CORPORATION WAS

BY REQUIRED

ITS

TABLED

ORDINANCE TO PREPARE ANNUAL ACCOUNTS WHICH, TOGETHER WITH AN AUDITOR'S

AND REPORT

A REPORT ON THE CORPORATION'S

WERE OPERATIONS, ANNUALLY IN THE LEGISLATIVE COUNCIL.

"THE MATTER HAS TO BE RESOLVED QUICKLY BECAUSE THE MTRC'S ANNUAL ACCOUNTS FOR 1990 ARF DUE TO BE FINALISED

ITS SHORTLY, AND AUDITORS HAVE INDICATED THAT THESE ACCOUNTS WILL HAVE TO BE IF REMEDIAL LEGISLATION HAS NOT BY THEN BEEN ENACTED.

QUALIFIED

/"FURTHERMORE, THE