Hong Kong's stock and futures markets, long ranked among Asia's most volatile and unregulated, have lived up to their reputation in the past two weeks. As the world has been buffeted with mammoth stock selloffs, they have become the only major trading floors to close for an extended period -- four days -- and to receive a financial bailout.

But some analysts there claim to see silver linings. The markets are getting new managers and attention from the government. The Bank of China, Beijing's prime financial representative in the British colony, helped in the $500 million-plus bailout, giving confidence to shaken investors.

"This will show the outside world that we are not a free-for-all kind of place," said L.H. Tan, managing director of Manufacturers Hanover Asia Investments Ltd.

Free-wheeling is the image that Hong Kong traditionally has had. Ceded to Britain as a trading outpost in 1841, it has survived as a preserve of 19th century laissez faire philosophy. Money comes and goes freely; taxes, regulation and social welfare spending are low.

Financial institutions have paid the price on a number of occasions. In the early 1960s, several of the colony's banks were besieged by panicked depositors and collapsed. In the early 1970s, the stock market rose to new heights and then collapsed, wiping out the savings of investors all over the colony. It sagged again on news three years ago that Hong Kong would revert to Chinese rule in 1997.

Still, Hong Kong has emerged as a major financial center. Its equities market is second in Asia, behind Tokyo's. Its futures market is second in the world, behind Chicago's.

Both markets joined in the 1980s' world bull market. But big trouble hit on Monday, Oct. 19, when the market's Hang Seng Index, apparently taking a cue from major declines in New York the previous Friday, fell 420 points. Officials quickly closed the exchange, a deep shock to many investors who were unable to sell their holdings.

Concern focused on stock index futures, with their particularly volatile prices and highly leveraged investors. Monday's big fall meant that many people could not make good on their debts in the market.

Over the next weekend, a consortium of banks and the Hong Kong government put together a $256 million loan package to rescue the futures market from imminent collapse. Officials feared that a failure of the futures market would have damaging effects on the stock market.

The markets reopened on Monday, Oct. 26. This time the Hang Seng Index nose dived a stunning 1,120 points, wiping out about 34 percent of the market's total.

But gloom turned to hope when Piers Jacobs, Hong Kong's financial secretary, announced before the opening of trading Tuesday that a second $256 million loan package for the futures exchange had been assembled. In this one, the Bank of China would be a major player, along with the colony's two major banks, the Hongkong & Shanghai Banking Corp. and Standard Chartered Bank.

China's role in the loan package was a key to restoring investor confidence. Ji Pengfei, director of the Chinese government's Hong Kong and Macao affairs office, gave additional room for optimism with a statement in Beijing: "In times of financial crisis like this, there are things China can do to help out."

On Tuesday, following the lead of foreign markets, stock and futures prices rallied, even though 43 members of the futures exchange were suspended for being unable to cover margin calls.

Later in the week, the government announced that it would launch an independent investigation into the stock and futures exchanges.

Major personnel changes have taken place, too. The chairman and vice chairman of the futures exchange have resigned and there is talk of the departure of Ronald Li as chairman of the stock exchange.

It was left to David Nendick, Hong Kong's secretary of monetary affairs, to express the government's hope that the colony will "emerge with a higher reputation than other financial centers." But brave talk and the impressive rescue measures could not hide the fact that Hong Kong had been stampeded into a bear market just like other exchanges around the world.

Special correspondent Robert T. Grieves in Hong Kong contributed to this report.