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HongkongBank
The Hongkong and Shanghai Banking Corporation Limited HKA 233/1
Head Office:! Queen's Road Central, Hong Kong
FOR FLE
520
(in recevant place)
I have, EC Aduses
JM Gray
Chief Executive and Deputy Chairman
STRICTLY PRIVATE & CONFIDENTIAL
a.
dr, i. :. Yeung,
Secretary for the Treasury,
Government Secretariat,
Lower Albert Road,
Hong Kong.
Your Ref: (23) in FIN CR 1/4366/81 Pt 8
Dead K.Y.
Pension Safeguards
ссб
I Stone
File
M
нас
17th August 1992
I refer to your letter dated 29th July and to the discussion which took place in this office on 8th August.
am
sorry
A 3 I explained on the telephone today we
some detail but I proposal in been unable to come up with a concerns of civil servants.
The
bank
Co
nave gone into this have say that we
the
scheme which would meet
loan to a
civil
a bankable
a making proposal envisages a servant which would be secured by a time deposit funded from the proceeds of the loan. This is certainly proposition but at this stage, and until the pension is paid out, the civil servant will not be receiving the protection he seeks. This is because, in the event that the Government defaults on ics pension obligations,
the bank will exercise its security rights over the deposit to repay leaving the civil servant out of pocket on margin and the loan fee but in the same position as
at present.
the loan, the interest he is in
from course comes
in made nave
the insurance the insurance
The potential safeguard of scheme, but from enquiries we
market we believe it would be very difficult co
for the
amounts
and
the period
necessary.
cover raise Political risk
insurance is a very specialised market; although there may be appetite for a degree of Hong Kong risk I am led to believe that LDC (Lesser Developed Country) claims in recent have made
for political risk
the reinsurance market
years both insurer I would
shallow and expensive. The leading political risk however is American Insurance Group ("AIG") and suggest that, if you decide to pursue this proposal further, AIG should be your first point of contact.
GPO Box 64, Hong Kong
Telephone:822 1111 Facsimile:(852) 868 0244 Telex:73201 нksQ HX Telegrams: Hongbank Hongkong
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