Hong Kong's implementation of the Financial Institutions (Resolution) Ordinance (FIRO) on July 7, 2017 reduces the Hong Kong government's tendency to support private-sector Hong Kong banks in the event of distress, in our view. Also, we consider that extraordinary government support will no longer be extended to non-Basel III compliant NDSD instruments under Hong Kong's current resolution framework. We are therefore lowering our ratings on BEA and its China-based subsidiary, and BEA's senior unsecured debt by one notch to reflect reduced government support. We are also lowering our issue ratings on BEA's non-Basel III NDSD by two notches. We are removing all the ratings from CreditWatch where they were placed with negative implications on April 25, 2017. The stable outlook
