Proper regulation best answer to pressure: Tung

Proper regulation best answer to pressure: Tung

SINGAPORE (Reuter): The best response to foreign economic
pressure is proper regulation, Hong Kong Chief Executive Tung
Chee Hwa said yesterday in the midst of market turmoil in
Southeast Asia.

That included market transparency and efficiency, Tung said in
a speech to business leaders in Singapore.

The process of opening markets brings great benefits but "the
process does mean becoming open, as well, to pressures from
outside, pressures that expose internal weakness," Tung said.

In recent weeks currencies and share prices in several Asian
countries have plunged, with some leaders like Malaysian Prime
Minister Mahathir Mohamad putting all or most of the blame on
foreign speculators.

Tung said that after the Hong Kong market collapsed a decade
ago, the then British Territory learned: "that the proper
response to these pressures is to regulate properly".

"Our experience is that the risks of the open market can be
managed by making the market operate as transparently and
efficiently as possible, by maintaining financial discipline in
the public sector, and by ensuring that financial institutions
manage their investments and risks properly."

He said Asian economic fundamentals are good and that the
region should "soon be back on the path to prosperity".