TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 192

1988-06-01 18:23 G. 1.S

Kong's

markets

by

issuers,

P.06/13

investors

and

intermediaries from outside the territory."

Hong

Kong

has

excellent economic fundamentals

it should

build on these in developing its stock markets.

four

We

things

managed well),

I £ this is to happen reforms are essential.

believe that Hong Kong should aim for

systemic stability (so that risks ate

orderly and smooth functioning markets (so that all the

systems operate properly), fair markets (so that there is

adequate disclosure to enable all parties to deal on an

equal footing), and, with all these, adequate protection

for investors.

In this the concept of effective risk management

It was this that failed in

is absolutely fundamental.

October threatening the systemic stability of the stock and

fetuses markets.

we

have

based

reform proposals

oa

self-regulation but as we say in para. 3.24 "We appreciate

that so-called self-regulation may appear to have failed in

Nevertheless, We continue to zacommend

Hong Kong.

practitioner-based

system as the best available to meet our

objectives for Hong Kong. We do so because we wish above

ali to avoid

the danger

of straight-jacketting

the