TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 174

10.

influence and the Governor would be most unlikely to introduce

legislation against the advice of its members. The Executive Council

comprises five ex-officio members, two official and eight unofficial

members. The latter, who are in the majority, have or represent

vested interests and, in practice, have considerable blocking power.

As an example, it is understood that the "unofficials" have decided,

following the establishment of Barclays' branch office, that no

further foreign banks will be licensed. And so be it: National

Westminster have been obliged to accept the status of a finance

Furthermore, the Legislative Council, which has the power

to pass (subject to the Governor's assent before becoming law) or

reject Bills, comprises the Governor as President (with both an

10 ordinary and a casting vote), four ex-officio, eight official and

15 unofficial members. Again the "unofficials" are in a majority.

The conclusion, therefore, is that an appreciation in depth

of the situation should be made on the spot with the objects of

company.

establishing:

(1) what is required;

(2) what is possible.

It should be added that the Financial Secretary is believed to be

considering the introduction later this year of legislation to bring

the finance houses within the jurisdiction of the Banking Ordinance.

Whilst this would not go far enough the fact that some sort of action

is contemplated provides a good opportunity to undertake a fundamental

review of the overall banking situation.

July 1973