TNAG-2181-FCO40-3118-Hong-Kong-nationality-international-support-1990 — Page 117

Economic Issues

CONFIDENTIAL

a) Financial Services in the Caribbean DTS

5. Mr January informed the meeting that the conclusions and

recommendations of the Coopers and Lybrand report had now been

approved by the Whitehall Steering Group and endorsed by Ministers.

The report had been published as a Return on 19 January.

Implementation of its recommendations had begun. In Montserrat's case, responsibility for the offshore finance sector had been transferred by Order in Council on 19 December from local Ministers

to local officials answerable to the Governor. We had now agreed with the government of Anguilla that a similar transfer of responsibility would be effected in the case of that Territory. Work on the proposed legislative changes was now underway in both

Anguilla and Montserrat. In the former, a moratorium on the issue

of new bank licences had been in force since 1 January. A Financial

Services Commission under the Governor, and an investigating Task

Force under the Senior Crown Council had been set up. The provision

of TC assistance to the DT governments was now in hand.

TC posts (eg Regional Financial Adviser, accountant to assist with Anguilla

Task Force) were now being advertised. A meeting of Governors was

being planned for late March to review progress in implementation.

Looking further ahead, WIAD and ERD would need to review the likely

implications of 1992 for the offshore finance sectors in the

Caribbean DTs.

b) Financial Services in Gibraltar

6.

Mr Williams observed that Gibraltar's problems in the financial

services sector were in some ways different from those in the

Caribbean DTs. There had been a series of financial scandals in

Gibraltar in the early 1980s. HMG had reacted by enforcing the

introduction of new banking legislation and the establishment of a Banking Commission answerable to the Financial and Development Secretary. However, Barlow Clowes had revealed that Gibraltar's company and financial regulations remained inadequate. The Chief Minister had now at last started to implement the necessary changes.

CONFIDENTIAL