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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (875)	11/13/1997 10:42:00 PM
From: ----------	Respond to of 2951

OFFICIAL TEXT FROM IMF MANAGING DIRECTOR'S COMMENTS Friday November 14 1997 Camdessus rules out bank crisis BARRY PORTER in Singapore A systemic banking crisis in Hong Kong is unlikely despite the run on the International Bank of Asia (IBA) this week, according to International Monetary Fund managing director Michel Camdessus. Speaking in Singapore yesterday during a regional tour, Mr Camdessus conceded some Hong Kong banks were having to make adjustments to cope with the pressures of inflated property prices, especially due to the recent rapid rise in interest rates, falling stock prices and the brief speculative attack on the Hong Kong dollar. Despite these concerns, he insisted: "These are solid institutions. "I am confident Hong Kong will cope well with the temporary tensions and that the adjustments will take place in an orderly way," said Mr Camdessus, the most senior international figure to comment on the issue to date. "Hong Kong has been extremely well managed so far and continues to be." In response to the IBA run, the Hong Kong Monetary Authority announced on Tuesday it was tightening checks on all banking institutions in the SAR, requiring them to submit abbreviated balance sheets on a daily basis so it could keep a precise eye on market developments. In addition, Financial Secretary Sir Donald Tsang Yam-kuen said the Government is prepared to tap its $534.5 billion Exchange Fund to support IBA and other banks should they experience difficulties. More than $1.4 billion was withdrawn from IBA this week by worried depositors, although the run would appear to have faltered. As a result of the IBA run, the share prices of some small Hong Kong banks have come under pressure. Mr Camdessus said: "I would be very surprised if a systemic banking crisis was to emerge in Hong Kong. "Hong Kong has a solid system of banking supervision and we trust them for doing a good job." Mr Camdessus yesterday described the currency and economic crisis gripping the region as a probable "blessing in disguise", claiming that Asia's tiger economies would emerge stronger as a result. He said the crisis had provided countries with the impetus to correct deficiencies, improve surveillance and governance and correct macro-economic faults which would provide a solid foundation for long-term economic growth. Attacks on various Asian currencies had exposed numerous faults. "It has shown us there are very diverse elements of foreign borrowing, monopolies, excessive controls, bad debt management and poor governance in all these countries," Mr Camdessus said.