XN000022-1991-07-19 — Page 14

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12

FRIDAY, JULY 19, 1991

(V)

THE ULTIMATE MAJORITY

SHAREHOLDERS

OF

THE BANK HAD BANK FOR THE HAD INJECTED $125

PECENTLY DECLARED THEIR SUPPORT FOR THE

AND PURPOSES OF THE 1990 ACCOUNTS MILLION OF CAPITAL IN THE FORM OF A SUBORDINATED LOAN;

THE

(VI)

THE BANK HAD SUBSTANTIALLY REDUCED ITS EXPOSURE TO REST OF THE BCC GROUP IN CONSULTATION WITH MY OFFICE;

THERE WAS NO EVIDENCE THAT BOCHR WAS IMPLICATED IN SUSPECTED FRAUD IN THE OTHER PARTS OF THE BCC GROUP.

THE

IN THE LIGHT OF THIS, AND BEARING 1N MIND THE SUBSTANTIAL'

ANXIOUS DEPOSITS WHICH BECHK HAD TAKEN FROM NON-BANK CUSTOMERS, I WAS

WAS AWARE OF THE TO KEFF THE BANK OPEN IF AT ALL POSSIBLE. 1

FACT

BANK WERE To CLOSE THAT IF THE

ON SATURDAY, I'T WOULD BE VERY SERIOUS RUN ON DIFFICULT FOR IT TO BE RE-OPENED WITHOUT PROVOKING A DEPOSITS.

ז

RELIEVE THAT IF I HAD ACTED TO CLOSE THE BANK ON SATURDAY, LEGAL ACTION, FOR I WOULD HAVE BEEN OPEN TO CRITICISY, AND POSSIBLE HAVING ACTED TO HASTILY.

THROUGH MY ABU DHABI SITUATION BANK

ME, ALLOWING THE BANK TO REMAIN OPEN ALSO ENABLED REPRESENTATIVE, TO HOLD DISCUSSIONS WITH THE GOVERNMENT OF

THE CHANGED TO ENSURE THAT IT STILL STOOD BEHIND BUCHK IN AND TO TRY TO HAVE THAT SUPPORT STRENGTHENED. TO HAVE CLOSED THE ON SATURDAY WOULD HAVE JEOPARDISED THIS ATTEMPT.

NORMALLY ON SATURDAY SOME DAY DID FROM THE BANK THEREFORE

FROM

TO TRADE BCCHK DID MANAGE

RELATIVELY LARGER THAN THOUGH SOME

NORMAL WITHDRAWALS WERE MADE BRANCHES. THE DECISION TO ALLOW THE BANK TO REMAIN OPEN THAT NOT THEREFORE RESULT IN A MAJOR LOSS OF LIQUID ASSETS AND THE POSITION OF DEPOSITORS AS

WHOLE WAS NOT MATERIALLY WORSENED.

ABILITY

ITS

THAT THE BANK'S DURING THE WEEKEND, HOWEVER, IT BECAME CLEAR

то

BUSINESS CONDUCT

BY COULD BE

THE AFFECTED THE BCC GROUP. A UNCERTAINTIES SURROUNDING THE REST OF

PARTICULAR INTERNATIONAL 'S DECISION TO BLOCK INSTANCE OF THIS WAS VISA

BCCHK BANK ON MONDAY CREDIT CARDS. THE POSSIBILITY OF A RUN ON THE

COULD

LIGHT THE

OF NOT BE RULED OUT, PARTICULARLY

GROWING PUBLICITY GENERAL MANAGER ABOUT THE PROBLE'S OF THE REST OF THE BOC GROUP, THE OF THE BANK AGRFLD WITH THIS VIEW.

IN

GOVERNMENT OF ABU ON SUNDAY EVENING, I WAS INFORMED THAT THE

STATEMENT OF SUPPORT DHABI HILE UNABLE TO PROVIDE THE CLEAR WRITTEN

ISOLATED FOR THE BANK WHICH I HAD REQUESTED. THIS LEFT THE BANK IN AN

THAT POINT POSITION AND AT

FELT

BE THAT IT WOULD

FAIRER TO SUFFERED SERIOUS DEPOSITORS IN GENERAL TO DRAW THE LINE BEFORE BCCHK

AT THE EXPENSE CASH WITHDRAWALS WHICH WOULD BENEFIT SOME DEPOSITORS

BUSINESS OF OTHERS. ACCORDINGLY, I ORDERED THE BANK NOT TO ON THE MORNING OF MONDAY, JULY 8.

OPEN FOR

/SINCE THAT