OUT TELEGRAM (CONT)
Classification and Caveats
SECRET
Pay
2
<<<<
2 asking for a number of points to be established and agreed with
3
4
you a s soon as possible.
4.
Firstly they note that Blye said that he hoped to put in
5 hand a factual analysis of the degree of exposure of different
6 Hong Kong banks. The Treasury strongly support this. (They were
7 P
8
Parade and a pompa concerned by a suggestion by Blye that in the worst
case, if a substantial portion of the property sector in
9 Hong Kong were to collapse, some form of support might have to
10 be considered for the Hong Kong and Shanghai Bank). They would
11 be grateful to know the result of Blye's research as soon as
possible.
12
clear
135. Secondly the Treasury suggest that there should be a
14 understanding about procedures for consultation and agreement
15 before heavy commitments for financial liability are entered
16 into by the Hong Kong authority. They realise the need to
17 preserve your
position as Governor, but they point
18 out that actions and statements in Hong Kong might in some
19 circumstances commit UK Government resources.
>
206. Thirdly the Treasury would like a chance to explore, with us
21 and you, the kinds of contingencies which might arise and which
22 would prompt consideration of Government support. They suggest 23 that we should attempt to define and where appropriate limit the
24 form and extent of any support which might be considered.
25 7. Littler has asked to have a word with the PUS about this
20 early in the New Year but thereafter has suggested a discussion
27 with you when you are in London between 12 and 18 January. It 28 would be very helpful to have your views including any
29 preliminary comments which might be helpful for the PUS when he
30
sees
31
Littler next week.
8. Independently, the Bank of England
32 HOWE
wkes the
you
33 NNNN prafullay
34
have asked
would be free to see the Governor,
ti 13 Tammy. We have undertaken, outgick
your views, ti see what could be fitted in to the kine-table.
NNNN ends
telegram
BLANK
Catchword
Y AU A
No comments yet.
Private notes are available after approval.