3
13. The most immediate harm done from Hong Kong's point of view is among the group of pension and mutual fund managers who had
Having had their entered the market within the last 18 months.
As one
fingers burned, they are not likely to return for more. banker noted, many of these middle-line managers had spent considerable effort, and in some cases put their necks on the line, to convince traditionally conservative investment committees about the merits of investing in Hong Kong,
14. But the key group of professional money managers and their
of the centy amaz☺
clients.
asnecialiv
geopolitical factors at play in Hong Kong, retain their
They are confident that commitment to the Hong Kong market.
Hong Kong's potential for sustaining its strong economy is enough guarantee that investments will return once stable trends are clear.
Suggestions
15. Ideas about tightening control and improving regulations vary, but the overwhelming consensus among all of those we consulted was that Hong Kong should take care not to over-react and go from one extreme to the other in a way that would remove Specific suggestions the traditional dynamism from the market. included:
16. a)
b)
c)
establish regulatory machinery for the market which is low-key in operation but effective when required, or .. cno comm tary suggested, closer to that of the watchdog than the bloodhound;
་
restructure stuck exchange management to balance interests between local brokers and foreign firms; curb excess speculation among local punters by raising margin requirements;
increase capitalisation requirements for brokers; and set up reliable cash settlement system modelled on the U.S. system.
Conclusion
17. The New York Office has already undertaken a limited amount
The Governor's visit to the United States of damage control. enabled him to explain the situation to a variety of people in key positions. During the first two or three weeks of the crisis the NYO issued press releases on a daily basis over the Business Wire (which covers not only the media but also brokers and financial institutions) itemieing importent developments,
The full text of relevant decisions and announcements.
announcements and speeches were mailed to a select group of The opportunity was taken targets in the financial sector. during the visit by the Attorney General in November to invite key players to small gatherings in New York and Boston for briefing sessions and the exchange of ideas.
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