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HKMA's response to media enquiries
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The following is issued on behalf of the Hong Kong Monetary Authority:
 
     In response to media enquiries regarding creditor hierarchy, the Hong Kong Monetary Authority has the following responses:
 
  1. The Financial Institutions (Resolution) Ordinance establishes the legal basis for the resolution regime in Hong Kong. Under the Ordinance, there is a clear order in which shareholders and creditors would bear losses in a resolution scenario.
  1. Holders of capital instruments (including core equity capital, Additional Tier 1 (AT1) capital and Tier 2 capital) issued by a financial institution should expect to be treated in resolution in accordance with the priority they would enjoy on a winding up of the institution. Accordingly, shareholders are the first ones to absorb losses, followed by holders of AT1 and Tier 2 capital instruments.

 
Ends/Wednesday, March 22, 2023
Issued at HKT 18:30
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