Before you groan "we donÆt need a task force, we need action", consider that if the government didnÆt put together such a group to question how it should handle the global financial meltdown, observers would in hindsight question if the chief executive had done the right thing by his people.
In recent weeks, for example, Hong KongÆs regulators have been swamped by thousands of retail investor complaints that structured products backed by Lehman Brothers, which have since lost most of their value, were being misrepresented. A task force could help sort out what action, if any at all, needs to be taken in such situations û as well as a myriad of other potential problems that could crop up that need to balance out the rights of investors with the rights of financial institutions.
And consider Bank of East Asia. In late September, Hong Kong-listed mid-size lender Bank of East Asia had to stave off a run on deposits. Account holders rushed to withdraw their money despite continued assurances from regulators and management that the fifth largest bank in Hong Kong was financially stable. A task force canÆt stop such a run per se, but it may help the government project a more assured voice that helps keep hysteria at bay and hopefully makes people think twice about taking banking advice from text messages, as many apparently did in the BEA case.
But a task force is all about its members û and the list of enlisted folks is impressive. The government has appointed 10 people, including Morgan Stanley Asia chairman Stephen Roach and Standard Chartered chairman Mervyn Davies, to the group assigned with the task of helping the city come to grips with the global financial crisis. Chief executive Donald Tsang will chair the first meeting, which will take place on November 3. Financial secretary John C Tsang will serve as deputy chairman.
"The challenges ahead of us are daunting,ö says chief executive Tsang in a press release. ôThe damage that the financial tsunami has inflicted on the global economy has yet to be fully revealed. We need to evaluate the situation, consider ways to respond, identify new opportunities, and ultimately enhance our international competitiveness."
David Burton, the head of the International Monetary Fund in Asia Pacific, will attend the first meeting to update members on the global impact of the current financial crisis. The stated aims of the group are to assess the impact of what the government is calling ôthe financial tsunamiö on the local economy and consider ways to respond. It will also formulate a work plan for the coming few months.
Other members of the task force make up a veritable WhoÆs Who of Hong Kong, including: Li & FungÆs chairman Victor Fung; HSBC's group general manager and global co-head of commercial banking Margaret Leung; KPMG partner Ayesha Macpherson; Johnson Electric Holdings chairman Patrick Wang; real estate agency Centaline's chairman Shih Wing-ching; the chairman of Roctec Futures Trading Co, K C Leong; Mathias Woo, the executive director of charitable international experimental theatre company Zuni Icosahedron; and Chinese University of Hong Kong vice-chancellor and president Lawrence J Lau.
ItÆs a balanced list spanning industry, real estate, the banking sector, charity, the government and academia. For sure, task forces are often known for simply presenting ideas that are never implemented, but they are also groups that simply by listening help the public vent frustration and they sometimes do actually come up with good policy ideas. Importantly, they can help bureaucrats think things through from more than just one perspective. Given the speed with which this financial crisis is unfolding, the proof of what type of task force this one will be will come soon enough.