The large presence of global banks in Hong Kong offers a well suited empirical setting to study the capital management of foreign bank subsidiaries from a host country perspective. Specifically, this paper uses the trade-off theory of leverage to investigate whether the leverage dynamics of...

The Hong Kong banking sector is embracing Fintech vigorously. The survey results indicate that on the whole incumbent banks considering Fintech as a complement and enabling technology, which facilitates them to improve efficiency and to meet the demand for under-served customers, out-number...

Using a confidential dataset of foreign bank affiliates (FBA) in Hong Kong, this study finds evidence of an international transmission of prudential policies through banks' balance sheets from a host country perspective. Specifically, in response to tighter capital requirements in the home...

This paper identifies major determinants of mutual fund flows to Hong Kong equities, which is essential for financial regulators and investors to understand potential sources of instability in domestic financial markets. We find that fund flows to global equities outweigh other fund-specific...

This paper assesses whether long-term institutional investors help stabilise or destabilise Hong Kong and international stock markets. We use a novel dataset based on individual funds issued by insurance companies and pension funds worldwide. This allows us to examine each economic region in...

Periodically a major financial innovation creates a new product class that changes the financial landscape. Examples include junk bonds that enabled leveraged buyouts, securitization that stimulated off balance sheet growth in banks, and credit default swaps that offered pure trading in credit...

The growing reliance on exchange-traded funds (ETFs), especially those that can be redeemed for cash (i.e., cash-redeemable ETFs), has raised concerns about their resilience to a market downturn. This study shows that abrupt redemption of cash-redeemable ETFs may occur during a market downturn....

This paper investigates the interconnectedness among cross-border shadow banking systems using a broad measure of shadow banking defined by the Financial Stability Board. We find these interconnections are tenuous during tranquil periods, but the systems are significantly linked in times of...

The study examines the predictability of 48 sovereign bond markets based on a strategy of 27,000 technical trading rules. These rules represent four popular trading rule classes, they are: moving average, filtering, support and resistance, and channel breakout rules, with numerous variants in...

This paper evaluates the financial spillovers between the US and emerging market economies (EMEs) using the methodology advocated by Diebold and Yilmaz (2009). Based on (i) cross-asset returns of sovereign bond, equity, and foreign exchange, and (ii) 27 individual long-term sovereign bond...