XN000022-1991-07-10 — Page 6

WEDNESDAY, JULY 10, 1991

IN

SIR PIERS SAID ALTHOUGH THE EXCHANGE FUND HAD BEEN USED RESCUING A NUMBER OF BANKS, THIS WAS AGAINST THE BACKGROUND THE FINANCIAL SECRETARY THEN HAD TAKEN THE VIEW, AND RIGHTLY SO, THE EXCHANGE VALUE OF THE CURRENCY OF HONG KONG WOULD OTHERWISE BEEN UNACCEPTABLY AFFECTED.

BEFORE

THAT

THAT

HAVE

"ON THIS PARTICULAR OCCASION, HAVING REGARD TO THE FACTS OF THE

TO AND

THE CASE, AS DESCRIBED TO ME BY THE COMMISSIONER OF BANKING,

MANAGEMENT, FACT THAT OUR MONETARY SYSTEM, AND OUR SKILLS IN MONETARY HAVE OVER THE PAST FEW. YEARS BEEN CONSIDERABLY STRENGTHENED, THE VIEW THAT THE EXCHANGE VALUE OF THE CURRENCY OF HONG NOT BE AFFECTED EVEN IF THE BANK WERE TO BE CLOSED DOWN.

KONG

I TOOK WOULD

IN

++ HE

"INDEED, THE EXCHANGE RATE HAS NOT BEEN AFFECTED BY EVENTS THE PAST FEW DAYS. THERE IS THEREFORE NO CASE FOR USING THE FUND, SAID.

"THE

PRESENT CIRCUMSTANCES ARE SUCH THAT, IN MY OPINION, EXCHANGE FUND HAS NO ROLE TO PLAY IN MATTERS DIRECTLY CONNECTED THE BANK. THIS POSITION WILL, OF COURSE, BE CONTINUOUSLY REVIEWED THE LIGHT OF THE CHANGING CIRCUMSTANCES, HE ADDED.

-

"

THE

WITH

IN

THE

NOTING THAT SOME CALLS HAD BEEN MADE FOR THE USE OF EXCHANGE FUND TO RESCUE THE BANK OR PAY OFF DEPOSITORS, THE FINANCIAL SECRETARY DREW ATTENTION TO SECTION 3(1) OF THE EXCHANGE FUND

WHICH STATED THAT

UNDER "THE EXCHANGE FUND SHALL BE ORDINANCE

THE CONTROL OF THE FINANCIAL SECRETARY AND SHALL BE USED FOR SUCH PURPOSES AS

DIRECTLY THE FINANCIAL SECRETARY THINKS FIT AFFECTING, EITHER INDIRECTLY THE EXCHANGE VALUE OF THE CURRENCY OF HONG KONG AND FOR OTHER PURPOSES INCIDENTAL THERETO".

OR

OF

SIR PIERS STRESSED THAT THE GOVERNMENT HAD TAKEN ALL NECESSARY TO SAFEGUARD THE ASSETS OF THE BANK IN THE INTEREST DEPOSITORS.

STEPS

"WE WANT TO MAKE SURE THAT THE ASSETS ARE THERE AND THAT THEY DO NOT DISAPPEAR FROM OUR JURISDICTION, HR SAID.

H

AS TO THE WAY AHEAD, THE FINANCIAL SECRETARY SAID COMMISSIONER OF BANKING WAS CONTINUING DISCUSSIONS WITH THE GOVERNMENT OF ABU DHABI, BUT THESE HAD NOT YET PRODUCED ANY RESULT.

THE

"THERE REMAINS, HOWEVER, THE POSSIBILITY OF A SALE OF THE AND THIS IS BEING PURSUED WITH VARIOUS INTERESTED PARTIES.

BANK

BEEN

HAS

THE

ANY

"IT HAS JUST BEEN BROUGHT TO OUR NOTICE THAT A LIQUIDATOR

ΤΟ APPOINTED

THE BANK'S HOLDING COMPANY IN LUXEMBOURG. COMMISSIONER IS SENDING REPRESENTATIVES TO LUXEMBOURG TO DISCUSS ARRANGEMENTS NECESSARY TO THE SALE OF THE BANK IN HONG KUNG, SIR PIERS SAID.

"

RECAPITULATING THE CIRCUMSTANCE CONCERNING THE SUSPENSION OF OPERATIONS OF THE BANK, SIR PIERS SAID THE COMMISSIONER OF BANKING'S OFFICE WAS ALERTED TO THE RECENT PROBLEMS OF THE BANK OF CREDIT AND COMMERCE

THE GROUP AT A MEETING OF THE BOC COLLEGE OF SUPERVISORS AT BANK OF ENGLAND IN LONDON ON JULY 2.

/"THIS FOLLOWED