TNAG-1031-FCO40-1281-Visits-by-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-th-1981 — Page 55

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ONGKONG AND SHANGHAI BANK BID FOR ROYAL BANK OF SCOTLAND

4. The problem of the rival bids by the Hongkong and Shanghai

Bank (HSBC) and the Standard Chartered Bank for the Royal Bank of

Scotland, was discussed between the Secretary of State and the

Governor of the Bank of England on 1 May.

5. The Bank of England is concerned that, as the HSBC is not

registered in the UK, ownership of a major UK clearing bank would

pass beyond the Bank's control with possible flood of other

overseas bids. The Governor of the Bank asked what could be done

to deflect the HSBC bid. The Secretary of State explained the

political difficulty of doing this.

6.

The Secretary of State for Trade decided on 1 May to refer

both the HSBC and Standard Chartered bids to the Monopolies

Commission.

Important that advice of Monopolies Commission should

not raise misconceptions about political and economic viability

of Hong Kong or give impression that HSBC bid would be rejected

because it is not 'British'. The LPS has written to the Chairman

of the Monopolies Commission on this. He has emphasised Hong Kong

Government's readiness to give evidence if necessary, particularly

on question of their supervision of banks in Hong Kong.

7. The Governor of Hong Kong will be meeting the Governor of

the Bank of England at 4.00 pm on 22 June.

THE NATIONALITY BILL

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8. HMG has done much to meet anxieties of Dependent Territories,

and particularly Hong Kong, that it was intended to loosen HMG's

ties with them. Special visits were paid in January/February

by Hong Kong Unofficials and by the Governor in March.

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