Dealing with failing institutions in Hong Kong

Author: IFLR Correspondent | Published: 15 Dec 2016

Hong Kong’s new resolution regime should smooth the way for wind-downs. Here’s how it would work in practice

Earlier this year, Hong Kong put in place its legislative solution (the Financial Institutions (Resolution) Ordinance) to deal with one of the more vexing issues to have come out of the recent financial crisis: how to deal with failing institutions that are too big to (be allowed to) fail. With the recent speculation surrounding Deutsche Bank, this legislation is prescient. But what will the Hong Kong authorities do were a hypothetical financial institution to fail?

Hong Kong is home to many international financial institutions and some home grown national champions. To support the resolution of globally important financial institutions with operations in Hong Kong and these home grown champions, the legislation casts its net necessarily widely to include authorised institutions (licensed banks, restricted licence banks and deposit-taking companies); licenced corporations...



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