H.K. to impose temporary measures to overcome financial crisis+

HONG KONG, Sept. 30 Kyodo - The Monetary Authority, Hong Kong's de facto central bank, said Tuesday five temporary measures will be imposed this week to overcome the financial crisis after stock markets across the world plunged after the United States failed to
adopt a $700 billion bailout plan.

''These temporary measures will prove to be quite sufficient,'' authority chief
executive Joseph Yam told reporters after meeting with financial officials.
He said the measures aimed at providing liquidity to banks and will be
effective from Thursday until March 2009.
Wednesday is a public holiday in Hong Kong.
Under the new measures, the authority will loosen its collateral requirements,
extend loan periods and reduce loan rates to banks that want to borrow through
the Discount Window, where banks can borrow Hong Kong dollar funds overnight
from the authority through repurchase agreements using eligible securities as
collateral.
''Because the banks are concerned on one hand about the credit worthiness of
other banks and, on the other hand, they want to preserve liquidity for their
own use, as a result of that they are not lending at all, or are only prepared
to lend short term money,'' Yam said.
He said the measures are short-term because it is hoped the global financial
crisis will ease by then, and also to prevent abuse by speculators.
Financial Secretary John Tsang said a financial storm is anticipated and the
''whole of Hong Kong'' will be affected.
''The measures are precautionary,'' Tsang told reporters before Yam's
announcement. ''A financial storm is heading towards us, we can feel it coming.
The financial system will continue to face pressure, therefore we need more
liquidity in the market.''
Meanwhile, Hong Kong's leader urged the public Tuesday to have confidence in
the territory's strong fundamentals.
Chief Executive Donald Tsang said the decision by the U.S. Congress will
''cause a period of instability throughout the world and the Hong Kong market
will suffer as well.''
''But we must remember that in dealing with financial crises of this kind, Hong
Kong has accumulated considerable experience. Over the last 10 years we
overcame the problem of the Asian financial crisis and economic problems led by
the SARS epidemic...We should have confidence in ourselves in dealing with
crises of this kind.''
The stock market witnessed a roller-coaster ride Tuesday with the Hang Seng
Index once dropping more than 1,000 points, or 6 percent after opening. But it
climbed back up and closed at 18,016, marking a 0.76 percent rise from Monday.
On Monday, the U.S. Congress voted down emergency legislation by the
administration of President George W. Bush to create a government fund with
taxpayer money and buy troubled assets from banks in an attempt to ease the
stress in the U.S. financial system.
It was reported a repackaged bailout plan could be presented for voting again
Thursday.