International Banking and Liquidity Risk Transmission: Evidence from Hong Kong S.A.R

Eric Wong, Andrew Tsang and Steven Kong

IMF Economic Review, 2015, vol. 63, issue 3, 515-541

Abstract: This study provides four findings regarding the international transmission of liquidity risk through global banks’ branches in host countries. First, we find that when home-country liquidity risk emerges, parent banks with higher shares of stable funding would sustain higher loan growth for their branches in Hong Kong S.A.R. than other foreign bank branches (FBBs) in Hong Kong S.A.R. Second, those FBBs that are net users (suppliers) of internal funding are found to have stronger (lower) loan growth than their peers in the face of liquidity risk. Third, these drivers of cross-sectional differences in loan growth become not important for the risk transmission when banks access official lending facilities. Finally, FBBs are more sensitive to U.S.-dollar liquidity risk than home-country liquidity risk.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.palgrave-journals.com/imfer/journal/v63/n3/pdf/imfer201526a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/imfer/journal/v63/n3/full/imfer201526a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:63:y:2015:i:3:p:515-541

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().