HKMA’s response to media enquiries

The Hong Kong Monetary Authority has clarified that the Financial Institutions (Resolution) Ordinance establishes the legal basis for the resolution regime in Hong Kong and sets out a clear order of creditor hierarchy. Holders of capital instruments, such as core equity capital, Additional Tier 1 (AT1) capital, and Tier 2 capital, should expect to be treated in resolution according to the priority they would have in a winding up scenario. Shareholders have the highest priority and would absorb losses first, followed by holders of AT1 and Tier 2 capital instruments. This response was given in response to media enquiries.



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