Resolution Regime

During the global financial crisis in 2008, many foreign governments were forced to use large sums of taxpayers’ money to bail-out financial institutions (FIs) that were “too big to fail” when they ran into difficulties. After that episode, the international community has reached a consensus to carry out a series of reforms, of which resolution is a major part. Resolution is the process by which a resolution authority can step in with a view to ensuring that an FI’s failure may be managed in an orderly way.

As the resolution authority for banking sector entities which include all authorized institutions (AIs), the Monetary Authority may use a set of tools known as stabilization options to manage the failure of an AI in order to maintain the stability and effective working of the financial system of Hong Kong, including the continuity of the AI’s critical financial functions, while seeking to protect public money.

Last revision date : 30 August 2023