TNAG-2754-FCO40-3971-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1993 — Page 61

CONFIDENTIAL AND PERSONAL

UMB 10211

RECI

VISTRY

22 JAM 1993

CISTRY

IN

kull

Mr Broadbent, Economic Advisers

HSBC/MIDLAND

1. I attach a letter from the Treasury passing on an update from the Bank of England about progress in sorting out supervisory issues relating to the relocation of HSBC mind and management to the UK.

2.

This seems to me to be largely regulators' business. Provided the Hong Kong Banking Commissioner is willing to accept this explicit avowal to the Bank of England's right to prevent HSBC Holdings baling out HSBC Ltd in certain circumstances, there is no reason for FCO Ministers to interfere.

3.

The only other FCO angle I can think of is the question of whether the Chinese should be informed of any of this, since the Bank of England's proviso will apply after 1997 as well. This is something to leave for the judgement of Sir W Purves probably he has played the Chinese pretty well so far. is something we might draw to Hong Kong's attention.

4. Any other thoughts?

But

ádreth

PF Ricketts

Hong Kong Department

WH 307

telno 2647

18 January 1993

midland.PETER

JEB

CONFIDENTIAL AND PERSONAL