TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 119

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not seem worth the risk of the embarrassment we

should suffer if it ever became known to other

signatories that we had done so.

(a) Any indication to the Governor that there may be n

be no further Sterling Agreements would

generate a formidable conflict of interest.

It is doubtful whether it would be fair to

give him such information in confidence.

(e) The message(s) conveying our proposals

(whatever they are) to the Sterling Agreement

holders will require most careful preparation,

not least for Hong Kong, whose potential

difficulties are greater than many. It would

not be feasible to put this work in hand for

Hong Kong in advance of the general policy

decision, 2 Any decision to give any sort of

advance warning of our thinking to the

Governor, even in confidence, would of course

require the agreement of the Treasury (and

Bank).

2.1 We have not consulted them about Mr Royle's

suggestion, but FRD are sure that they would

oppose the idea most vigorously for the reasons set

out above.

I

2

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