TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 110

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Appendix. I

BANK OF ENGLAND

LONDON EC2R 8AH

THE DEPUTY GOVERNOR

R

Sir Gordon Borrie QC Director General

office of Fair Trading Field House

15-25 Bream's Buildings London

EC4A 1PR

13 May 1992

C juta

Dear Sir Gordon

HSBC/MIDLAND

Thank you for your letter of 13 April.

I can now confirm that we expect shortly to reach agreement with HSBC, following a series of discussions over the last few weeks, regarding the major prudential issues on which I touched in my earlier letter to you. While, therefore, our formal consideration of their proposal is not yet complete, we are close to concluding that the bid does not give rise to prudential concerns and I would expect our final decision to be sent to them within the next week

or so.

In the meantime, the appearance of Lloyds Bank on the scene does, of course, present us with two very different potential scenarios for the future structure of the UK banking industry. We have naturally been reviewing in detail the implications of each and have prepared a paper, a copy of which I enclose, which analyses the wider issues and sets out our conclusions.

EA J Ged

Popo

Crem Bather.

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