Bank resolution: why Asian regulators must act now

Author: Ashley Lee | Published: 11 Nov 2013
  • Because Asia largely avoided the worst of the 2008 global financial crisis, lawmakers and regulators have been less politically motivated to look towards new bank resolution regimes;
  • But Asia’s resolution regimes are seen as more fragmented than those in more developed financial markets such as the US and the UK;
  • Hong Kong, considered a global financial centre, is an example: it does not have a bank resolution regime. Any failed bank would be liquidated under its corporate liquidation process.

Although bank resolution has remained a key topic in the aftermath of the global financial crisis, solutions in Asia seem to be focused on local rather than international concerns.

Panelists at Latham & Watkins’ restructuring seminar in Hong Kong agreed that Asia was less impacted by the 2008 global financial crisis than other areas, although the default of Lehman Brothers’ structured notes, called mini-bonds, affected retail investors in Hong Kong...