TNAG-1030-FCO40-1280-Proposed-visit-by-Humphrey-Atkins--Lord-Privy-Seal--to-Hong--1981 — Page 158

CONFIDENTIAL

of stock market implications) to offer any comment until the

MMC report has been published.

15. There was some press speculation in November about the

introduction of legislation to control bank mergers and takeovers

to replace the present non-statutory arrangements under which

banks are expected to secure the Bank of England's approval

before making a bid. The HKSB is known to have bid for the RBS

against the Bank of England's wishes. Following Ministerial

discussion, the lobby was informed that the Government does not

intend to introduce such legislation.

10215 (1860) 1981

Here 10215

see HKK

16. The statements on banking supervision in Hong Kong made by

the Lord Privy Seal on 18 November were interpreted by some as

an indication of Governmental support for the HKSB bid. However,

HMG takes no position on the commercial merits of either bid though

it accepts that the HKSB should not be discriminated against

merely on grounds of its incorporation in Hong Kong.