TNAG-1168-FCO40-1448-Future-of-Hong-Kong-1982 — Page 46

1

<<<<

OUT TELELETTER (CONT)

Classification and Caveats

SECRET /

PERSONAL

2

2 Last resort in the financial crisis of 1965 it might be less

3

likely to do this today in view of the increased scale of Hong Kong's financial activities as well as the approach of 1997. 5 They ask whether this might lead to difficulties in the banking

6

7

8

9

10

11

12

13

14

system which would exacerbate the problems caused by a slide in

confidence.

-

In

3. I fully realise that the whole question of Hong Kong's financial mechanisim is under continuous study and has impli

cations both for domestic confidence in the Territory and for

attitudes towards, Hong Kong by outside investors and others. particular I realise that doubts about the Hongkong and Shanghai

Bank, if they became public knowledge, might in themselves con-

tribute to a lack of confidence. But it would be very helpful

if you could take the opportunity of Mallaby's visit to explain

up-to-date thinking on these problems. You may think it worth

while arranging for him to see

see John Bremridge. I should be

grateful to have your views when you have discussed with Mallaby.

15

16

17

18

19

20

SIGNED R D CLIFT

21

NNNN

22

23

24

25

26

27

28

29

30

31

32

33

34

[`,"lends

Catchword

BLANK

heyletter

451

85590 3921