TNAG-2245-FCO40-3228-Bank-of-Credit-and-Commerce-Hong-Kong-Limited-(BCCHK)-1991 — Page 255

1991-07-10 15:39 MONETARY AFFAIRS BRANCH.

852 865 6146 F.02

Sir,

SPEECH BY THE HONOURABLE THE FINANCIAL SECRETARY IN LEGISLATIVE COUNCIL: WEDNESDAY 10 JULY 1991

(FINAL)

Suspension of operations of

the Bank of Credit and Commerce Hong Kong Limited

1017

I wish to inform Members of the present position in relation to the Bank of Credit and Commerce Hong Kong Limited, which I shall refer to as the Bank. The Commissioner of Banking's Office was alerted to the recent problems of the Bank of Credit und Commerce Group at a meeting of the BCC College of Supervisors at the Bank of England in London on Tuesday last week (2 July). This followed the discovery by the Bank of England of suspected fraud in parts of the Group outside Hong Kong. The results of that meeting were received in Hong Kong on Wednesday, 3 July. Various contingency measures were immediately put in place by the Commissioner of Banking's Cffice, including sending a team of bank examiners into the Bank to examine its loan book.

2

On the evening of Friday, 5 July, it was announced in London that supervisory authorities in a number of countries had moved to close down the business of parts of the Grous. A decision had to be made at that point on whether to allow the Bink to open the following morning or not. Since the Bank is a completely separate entity from the rest of the Group and since its operations here were considered sound and viable, the initial concern was to try to keep the Bank open. I shall have more to say about this in a moment. The Bank managed to trade relatively normally on Saturday, although some withdrawals of deposits were made.

13. We took the

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