Hong Kong banks have agreed to buy back controversial financial products backed by failed US investment bank Lehman Brothers at market value, a spokesman for the banking industry said today.
"(We have) agreed to accept the government's plan to buy back Lehman Brothers mini-bonds at market value," a spokesman for the Hong Kong Association of Banks told reporters.
He said the banks made the move due to the "extraordinary market situation".
The decision, which the government had pushed for, comes after weeks of protests by disgruntled investors, many of whom claim the mini-bonds were mis-sold by the banks.
The mini-bond, complex financial products that include elements of derivatives linked to risky mortgages, were presented as solid investments, protestors say.
But they lost most of their value after Lehman's collapsed last month.
The spokesman said accountancy firm Ernst and Young had been appointed to work out the value of the bonds, but no timetable had been set.
Some investors had previously rejected the government's proposal, saying they should receive a full refund of their investment rather than a reduced market-value sum.
