1991-07-10 15:40 MONETARY AFFAIRS BRANCH.
852 865 6146 F.05
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9.
"the Exchange Fund shall be under the control of the Financial Secretary and shall be used for such purposes as the Financial Secretary thinks fit affecting, either directly or indirectly the exchange value of the currency o Hong Kong and for other purposes incidental thereto".
Although the Exchange Fund has been used before in rescuing a number of banks, this was against the back ground that the Financial Secretary then had taken the view, and rightly so, that the exchange value of the currency of Hong Kong would otherwise have been unacceptably affected. On this particular occasion, having regard to the facts of the case, as described to me by the Commissioner of Banking, and to the fact that our monetary system, and our skills in monetary management, have over the past few years been considerably strengthened, I took the view that the excha ige value of the currency of Hong Kong would not be affected even if the Bank were to be closed down. There is therefore no case for using the Fund. Indeed, the exchange rate has not been affected by events in the past few days.
10. The present circumstances are such that, in my opinion, the Exchange Fund has no role to play in matters directly connected with the bank. This position will, of course, be continuously reviewed in the light of the changing circumstances.
11.
Let me stress that the Governmen has taken all necessary steps to
to safeguard the assets of the tank in the interest of depositors. We want to make sure that the assets are there and that they do not disappear from our jurisdiction.
TOTF P.05
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