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Will Asia Pacific regulators be keen to embrace wider bail-in measures?
Banks could expect greater government support in 2017.
The assumptions of Moody's of a generally “high-to-very high” probability of government support for APAC banks (ex-Hong Kong) are unlikely to change in 2017, because regulators are not keen to embrace wider bail-in measures. Early public support remains the preferred way to prevent banking stress.
"Hong Kong is moving closer to an operational resolution regime, and will likely implement one in 2017. This could lead to lower government support uplift in our ratings of Hong Kong banks. Upcoming regulations are credit-positive for banks, with generally manageable adjustment costs," adds Moody's.
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