CONFIDENTIAL
MEETING ON HMOCS MATTERS: 20 DECEMBER 1991
Points to make
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Most grateful to Sandra Brown, Don Rayson and Dave Fish
(and Mr Ballantyne, Government Actuary not at meeting) for visiting Hong Kong at short notice to pursue matters raised
in our paper of 29 August.
-
Have had full reports from the Governor and Dave Fish. I
am glad you were able to see all the key players and
V
grateful for your hard work: imagine the atmosphere was not
always easy Hong Kong can be a tense and claustrophobic place: real pressures on those who have had to get used to operating in the Joint Declaration framework and now have
new problems with Hong Kong politicians.
Look forward to seeing your own report of the visit. As
time short today, perhaps best to concentrate on next steps
ie way forward:
Sterling safeguards
-
Do you now accept that capitalization is not feasible?
(Defensive: commercial hypothecation) How much are the banks likely to want to cover management and interest margin? Surely too onerous for most individuals. Do not see that HKG could make any contribution: not negotiable with the Chinese. Would Treasury contemplate a contribution? Preference for quantifiable real cost now to uncertain contingent liability after 1997? Would banks want
an HMG guarantee? Would Treasury agree this? If not, the cost will be even higher as banks insure against political
risk.
NC1AAY/1
CONFIDENTIAL
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