TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 26

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THE ROLE PLAYED BY THE HONG KONG AND SHANGHAI BANK. HE HOPED THE HKSB WOULD CONTINUE TO MAINTAIN ITS ROLE AND RESPONSIBILITIES IN HONG KONG BOTH BEFORE AND AFTER 1997, AND PLAY A RESPONSIBLE ROLE IN MAINTAINING PROSPERITY AND STABILITY. HE UNDERSTOOD WHY IT WAS THAT SEVERAL MEASURES HAD BEEN ADOPTED BY THE HKSB IN RECENT YEARS DIRECTED AT ITS INTERNATIONAL ACTIVITIES. BUT THE HKSB ALSO PERFORMED AS HONG KONG'S CENTRAL BANK, AND THERE WAS GROWING CONCERN AMONG THE HONG KONG PUBLIC OVER SOME OF THE STEPS IT HAD TAKEN. HE HOPED THE BANK WOULD PAY DUE REGARD TO THE MAINTENANCE OF THE CONFIDENCE OF HONG KONG PUBLIC. HE HAD DISCUSSED THIS WITH THE GOVERNOR OF THE BANK OF ENGLAND GOVERNOR.

10. THE FOREIGN SECRETARY SAID HE UNDERSTOOD THE SPIRIT IN WHICH LI HAD RAISED THIS SUBJECT. AS A COMMERCIAL BANK THE HKSB WAS NOT UNDER GOVERNMENT CONTROL BUT HE WAS IN NO DOUBT THAT THE BANK WAS MAINTAINING ITS ESSENTIAL RESPONSIBILITIES AND WEIGHT IN HONG KONG.

THAT WAS IN OUR INTERESTS TOO AND HE WAS SATISFIED THAT THAT WAS THE BANK'S INTENTION. HE HAD KNOWN MR PURVES FOR MANY YEARS AND RESPECTED HIM. HE AND HIS HKSB COLLEAGUES FELT THE NEED TO STRENGTHEN THE BANK'S INTERNATIONAL ACTIVITIES, BUT NOT TO CHANGE ITS BASIC CHARACTER. IT WOULD PLAY AN INTERNATIONAL ROLE OF GROWING IMPORTANCE, WITH ITS BASE IN HONG KONG. SPEAKING PERSONALLY, THE FOREIGN SECRETARY SAID IT WAS A GOOD THING THAT THE BANK'S BID FOR MIDLAND HAD GONE THROUGH. THE HKSB WOULD BE STRENGTHENED THEREBY, TO THE BENEFIT OF HONG KONG. OF COURSE THIS WAS A SENSITIVE TIME, HENCE CHINESE CONCERNS, BUT HE BELIEVED THE CHINESE SHOULD BE REASSURED BY THE OUTCOME.

HURD

Well..

YYYY

ΜΑΙΝ

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FED

HKD

ERD

ECONOMIC ADVISERS NEWS D

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45

PS

PS/MR GOODLAD

PS/PUS

SIR J COLES

MR HUM

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