Both banks hope to raise capital from foreign investors for the new units, in return for giving them a portion of their business in these distressed assets.

ECONOMIST: A curious proposal by one of Japan's biggest banks

Panmure Gordon analyst Sandy Chen also points out that, as prudent as HSBC has been with its investment banking business, it has made some opportunistic acquisitions of distressed assets in the past, most notably in the case of Household International in the United States.

FORBES: Magazine Article