Determinants of the Capital Level of Banks in Hong Kong

Jim Wong, Ka-Fai Choi and Tom Fong ()

Chapter 8 in The Banking Sector in Hong Kong, 2008, pp 159-190 from Palgrave Macmillan

Abstract: Abstract Banks incorporated in Hong Kong generally maintain a capital adequacy ratio (CAR) well above the regulatory requirement.1 For example, the average CAR of licensed banks was 28.3 per cent in the second quarter of 2004, against an average required minimum of just 10.3 per cent.2 This phenomenon is also common in other economies.3 It raises the question of what factors determine the actual amount of capital held by banks and, specifically, whether changes in regulatory requirements can affect the level of bank capital.4

Keywords: Banking Sector; Capital Requirement; Large Bank; Small Bank; Capital Ratio (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1057/9780230227378_8

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