§ 17. Mr. Brewisasked the Secretary of State for the Colonies what precautionary measures he is taking to prevent a repetition of the run on the banks in Hong Kong which occurred in December last; and if he will make a statement.
§ Mrs. WhiteThe failure of one small bank, and suspension of payments by another, led to a high rate of withdrawals from other banks for a short time in February, 1965. Action by the Hong Kong Government in concert with the leading banks quickly restored the position to normal and there is no indication that the strength of the banking system as a whole has been affected.
A new Banking Ordinance came into force in December, 1964. The Hong Kong Government will use the powers conferred by the Ordinance to ensure 260W adequate regulation and inspection of the affairs of all banks and is considering whether recent events indicate any need to strengthen these powers.
While overall liquidity is still 29 per cent., certain banks need to increase their liquidity. To help them to do so without readjusting their advances too rapidly, the Hong Kong Government is arranging to make available to them substantial liquid funds from its reserves in London.