Carrie Lam, the Chief Executive in Name only (CENO), seems to think that it is quite possible to undermine Hong Kong’s banking system while maintaining the SAR as a viable financial center.

However, by weaponizing the law and using the banks for political purposes, her administration strikes a dagger straight at the heart of basic principles that underlie bank operations. They can be summed up in two words – safe custody.

When it can no longer be guaranteed that bank customers have access to their funds and politics starts playing a role in the custodianship of these funds, the game is up. No sane person will have confidence in a banking system where uncertainty hovers over customer’s ability to gain access to their funds.

However, the police, with the apparent cooperation of major banks, are now freezing accounts without going through any kind of judicial procedure and the cases of seizure are mounting. Instead of alleging that these funds are products of a crime, which would require a court order, they have avoided going to the courts by repeatedly insisting on freezes on grounds of ongoing investigations. This is an extraordinary abuse of the system, albeit legal, and has, for obvious reasons, rarely been used prior to the rise of the 2019 protest movement.

In the name of “investigation”, the assets of the Spark Alliance have been frozen for the better part of a year. More recently the bank accounts of not just ex-Legco member Ted Hui but of all his family were also frozen and the Church of Good Neighbours, notable for its work among the homeless, has been threatened with closure following another freeze. There are other less high-profile cases but the thread that connects them is not the law but their association with the democracy movement.

The CENO insists that these actions are fully in accordance with the law, in the same way that she says freedom of expression is undiminished by police storming into a newspaper office and in the same way that freedom of assembly is being upheld by banning all forms of protest. In every case a legal justification can be found for abuse and in every case the integrity of the rule of the law is undermined by abusing the system.

Despite these developments, it is still possible to find a great number of people who shrug their shoulders and say they have nothing to worry about as long as they stay away from any form of protest. What they singularly fail to understand is that once the foundations of the system have been undermined, the whole edifice no longer becomes sustainable.

Anyone doubting this assertion needs look no further than across the border where citizens insistent on pursuing their legal rights, for example to land ownership or statutory labor conditions, quickly find they are jailed or intimidated by the authorities. In case memories are short, think of the aftermath of the outbreak of the coronavirus in Wuhan that has resulted in jail and intimidation for those telling the truth about the spread of the disease – the weaponized Mainland legal system has found ways of dealing with them. The victims are not political dissidents but citizens rightly concerned over the spread of a life threatening epidemic.

What has all this to do with the integrity of Hong Kong’s financial system? The answer is that, to use the building analogy again, no house stands firm when its foundations are shaken.

Once the message gets out that Hong Kong’s banking system is subject to arbitrary seizures and other forms of intervention by the police, confidence evaporates at great speed. And once it is clear that disputes with the authorities, an everyday occurrence in the financial sector, will be subject to political considerations, the message sent out to pull out of that sector with the greatest of speed.

In the midst of all this and with her extraordinary ability to turn every problem into an even bigger problem, the CENO is pointing the finger of blame for this situation at one of its victims, Ted Hui. “Is this individual a trustworthy individual?”, she asks. Her tin ears fail to detect that the question should much more properly come back to the person asking it.

Meanwhile, the CENO has publicly stated that because of sanctions imposed by the US, she is keeping the vast sums of money paid to her from the public purse in cash. This sure sounds like a solution to the banking problem, unless, of course, you think about it.

(Stephen Vines is a Hong Kong-based journalist, writer and broadcaster and runs companies in the food sector. He was the founding editor of ‘Eastern Express’ and founding publisher of ‘Spike’. In London he was an editor at The Observer and in Asia has worked for international publications including, the Guardian, Daily Telegraph, BBC, Asia Times and The Independent and, during Hong Kong’s 2019/20 protests, for the Sunday Times. He hosts a weekly television current affairs programme: The Pulse”

Vines’ latest book Defying the Dragon – Hong Kong and the world’s largest dictatorship, will be published early next year by Hurst Publishing. He is the author of several books, including: Hong Kong: China’s New Colony, The Years of Living Dangerously - Asia from Crisis to the New Millennium, Market Panic and Food Gurus.)

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