Using a regulatory dataset of foreign bank branches in Hong Kong, this study finds evidence of the international transmission of funding shocks from home countries of global banks through their internal capital markets during the 2007-08 financial crisis. Global banks are found to buffer...

This paper sheds light on the transmission mechanism of loan-to-value (LTV) policy to financial stability by providing three findings from Hong Kong. First, there is evidence that LTV cap tightening since 2009 has dampened both borrowers' leverage and credit growth, and that lower leverage has...

Under the Linked Exchange Rate system, both Hong Kong dollar (HKD) narrow money (M1) and broad money (M2 and M3) are endogenously determined by factors such as economic activity and capital flows. Although these monetary aggregates do not provide any indication of the policy stance of the Hong...

This paper develops both a bivariate and a multivariate indicator model using a large group of high-frequency economic indicators to forecast Hong Kong's non-rental component inflation. Indicator models can offer timely forecasts on future inflation developments because monthly indicators are...

This paper first investigates whether there is a cointegration relationship between Hong Kong¡¦s consumption and wealth using the latest cointegration tests that allow for structural breaks. Our tests show there is only limited empirical support for the existence of a cointegration...

This paper estimates pass-through of exchange rate changes to domestic inflation in Hong Kong in a two-step approach. We first estimate exchange rate pass-through to import prices and then from import price to domestic inflation using a Phillips-Curve model. We find that Hong Kong¡¦s exchange...

In macro surveillance work, we often find it difficult to assess the state of the Mainland economy based on unadjusted monthly or quarterly data as the underlying economic trends are obscured by seasonal variations and the effect of moving holidays. Standard procedures exist for seasonal...

The paper explores what information on cross-border fund flows between Hong Kong and the Mainland can be extracted from existing statistics on banking transactions. As the stock of gross liabilities has been larger than claims since mid-1999, the Mainland remains a net supplier of funds (in...

This paper revisits the relationship among consumption, income and wealth using Hong Kong data. We find that the permanent income hypothesis is weakly supported by Hong Kong¡¦s consumption data prior to 1997, but it is not supported for the sample period after 1997 and the whole sample period...

The present paper uses a two-step approach to estimate the pass-through effects of changes in international commodity prices and the RMB exchange rate on domestic consumer price inflation in China. We first estimate the pass-through effects of international commodity prices on producer prices...