Counsel in Hong Kong have defended the
territory’s proposed bail-in regime against
suggestions that bondholders receive insufficient protection.
They argue that it would lend greater flexibility to bank
press release published on the 15th,
Moody’s dismissed the resolution regime as credit
negative for non-deposit senior unsecured creditors, citing
them as sole bearers of losses in future bail-ins.
But local counsel have pointed to the flexibility of the
territory’s drafted bail-in regime in maintaining
financial stability, with all types of creditors, except
depositors, having been included in it.
"The fact that senior unsecured debt is not excluded simply
provides an option to the financial institution and to the
authorities to use that means by which to improve or shore up
the balance sheet," said
David Kidd, partner at Linklaters in Hong Kong.