THE after-effects of Hongkong's most popular public offering forced banks to borrow record amounts of emergency cash yesterday from the Government to cover their positions at the end of the day. The Office of the Exchange Fund's discount window lent a total of $2.8 billion to banks in overnight assistance against collateral, the largest one-day direct transfusion of funds since the window was introduced in early June last year. ''If you have large amounts of money moving around in the system, it's a bit like musical chairs,'' said Mr Joseph Yam Chi-Kwong, chief executive designate of the Hongkong Monetary Authority. ''At the end of the day you have banks which find themselves without a chair.'' Meanwhile, a Chinese official said the overwhelming demand for last week's share flotation showed there was a need to reform the system for launching new issues. A group recently formed to study the monetary and banking implications of new share issues, chaired by Mr Yam, will closely question banks during the next few days on their understanding and management of the risks associated with share financing. The share subscription for Denway International Holdings, which owns a stake in a car factory in Guangdong, was oversubscribed 658 times, attracting $240 billion in funds for $403 million to be raised from the listing. Mr Zhu Xiaohua, deputy head of the economic department of the New China News Agency's Hongkong branch, said yesterday he thought a better share subscription system was needed with more issues on the way. Mr Yam noted that the Hongkong dollar's exchange rate to the US dollar remained firm through the day and interbank lending rates also held. ''This is a clear indication that our liquidity adjustment facility works, and works well,'' he said. Yesterday's borrowings left a record overnight balance of $4.95 billion in the banking system, up from a $1.5 billion long-standing balance plus an injection of $650 million from the Exchange Fund last week, during the height of the share subscription frenzy. Loans extended by the discount facility are repaid the following day, but Mr Yam would not say when the $650 million booster designed to relieve pressure on the exchange rate would be taken back. Mr Yam said the heavy demand had been ''no problem'' for the Exchange Fund or the monetary system, but there were unassessed risks involved.