TNAG-1649-FCO40-2296-Hong-Kong-Commissioner-of-Banking-s-annual-report-for-1986--1987 — Page 66

42.

The cost of maintaining stability was strongly debated during the year politically and by

economic commentators generally. In fact, as the

Financial Secretary pointed out in a general

statement and also to the Legislative Council, the cost was small in relation to the Exchange Fund and negligible to the risks facing the banking sector

since confidence was broken in 1982. The Govern-

ment's aim "has been the protection of the deposits

of the citizens of Hong Kong and the confidence of

bankers here and internationally in our banking

system." In this connection, it should be stressed

that the Commissioner does not act alone. The use

of the Exchange Fund is statutorily a matter for the Financial Secretary. In taking any action which

might result in the use of the Exchange Fund, the

Commissioner has, therefore, an obvious need to

consult closely with Monetary Affairs Branch and the

Financial Secretary. But more generally, in the

administration of the Ordinance there are specific

requirements for consultation on a variety of

issues. The Banking Ordinance gives the necessary powers to the Banking Commissioner which he must be prepared to exercise and, on occasions, immediately

Throughout the year, there was, however, full

consultation within the Government and complete

co-operation when required in various lines of action. This co-operation was assisted during the year by the Deputy Secretary for Monetary Affairs acting for the Commissioner during his absence from

Hong Kong. The banking scene is now vastly changed from January, 1986. The policy of the Commissioner will, however, remain the same, namely to deal with

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