TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 122

COMMERCIAL-IN-CONFIDENCE

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We are not aware of any public policy grounds for seeking an exit for the HSBC/Midland bid from consideration under the EC Merger regulation in order to be considered by the UK competition authorities. I should add moreover that any decision by HMG to invoke the procedures for returning this bid to UK jurisdiction could itself be interpreted, in Hong Kong and internationally, as a lack of confidence by the British Government in the long-term financial stability of Hong Kong: this could have very damaging political and economic consequences there, and consequently here.

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ALASTAIR GOODLAD

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COMMERCIAL-IN-CONFIDENCE