Hong Kong’s banking system has historically been prone to repeated crises that prompted slow and piecemeal regulatory responses. Hong Kong’s unusual institutional framework, without a central bank and with a financial secretariat reluctant to take consistent responsibility for the banking system, created opportunities for regulatory capture by incumbent banks. Importantly, the emergence of the 3-tiered system of financial institutions in the 1970s created supervisory vulnerabilities that culminated in the expensive and prolonged banking crises from 1982-86. Drawing on archival records from Hong Kong, USA, UK and Switzerland, this paper explores the turning points in the development of the regulatory framework, identifying evidence of regulatory capture and regulatory competition during a period of rapid internationalisation of financial markets.  FULL DETAILS