The aftermath of the Lehman Brothers collapse in Hong Kong : the saga, regulatory deficiencies, and government responses

The article examines the fallout of the Lehman Brothers collapse in Hong Kong. As an international financial hub in Asia, Hong Kong was profoundly affected by the collapse of this company. As a result, it impacted negatively on the public's confidence in the Hong Kong banking sector. Furthermore, this event has exposed a number of regulatory deficiencies in Hong Kong. In response to this financial crisis, the Hong Kong Government has made an unprecedented move to negotiate with local banks to refund the investors. In addition, the Government has also sought public consultation on proposal to enhance the regulation of the sale of financial products. This article argues that there need to be amendments to the prevailing laws and the inclusion of legal rules to back up those proposed measures so that the disclosed information from the financial institution will not mislead investors or misrepresent the products offered.