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Hong Kong as international banking center: present and future

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  • Alicia Garcia-Herrero

Abstract

The banking industry is key for Hong Kong’s economy but Hong Kong is not a big international banking center, at least not when compared with other centers belonging to large economic areas, such as New York and, to a lesser extent, Tokyo. Within Asia, Hong Kong has a larger banking sector as a whole but similar if we focus on the off-shore side of it and growing faster than in Hong Kong. Furthermore, Singapore is being more active as a banking platform for international corporates while Hong Kong remains larger in terms of banking relations. In fact, Hong Kong continues to have one of the highest concentrations of large banking institutions in the world.Such international banking platform, together with the increasing local presence of Chinese banks, offers Hong Kong a unique opportunity to become a major banking center, probably the largest off-shore center in Asia. Whether Hong Kong will reap this opportunity will very much depend on how it navigates among the opportunities that China offers in is current situation of capital controls without losing its international clout. In fact, Hong Kong banking system should benefit from the business from China coming off-shore due to capital controls (including RMB settlements but also issuance of RMB-denominated bonds). However, it should also look for non-Chinese related banking business so as to ensure that it remains distinguishable from Chinas’ domestic banking system in the years to come.

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  • Alicia Garcia-Herrero, 2011. "Hong Kong as international banking center: present and future," Working Papers 1101, BBVA Bank, Economic Research Department.
  • Handle: RePEc:bbv:wpaper:1101
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    3. Alexander Mihailov, 2009. "Exchange rate pass-through to prices in macrodata: a comparative sensitivity analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 346-377.
    4. Alexander Mihailov, 2009. "Exchange rate pass-through to prices in macrodata: a comparative sensitivity analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 346-377.
    5. Otani, Akira & Shiratsuka, Shigenori & Shirota, Toyoichiro, 2003. "The Decline in the Exchange Rate Pass-Through: Evidence from Japanese Import Prices," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 21(3), pages 53-81, October.
    6. Coricelli, Fabrizio & Jazbec, Bostjan & Masten, Igor, 2006. "Exchange rate pass-through in EMU acceding countries: Empirical analysis and policy implications," Journal of Banking & Finance, Elsevier, vol. 30(5), pages 1375-1391, May.
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    Cited by:

    1. repec:eee:touman:v:52:y:2016:i:c:p:395-404 is not listed on IDEAS
    2. Choi Sang Rim & Park Daekeun & Tschoegl Adrian E., 2016. "Banks and the World’s Major Banking Centers, 2010," Global Economy Journal, De Gruyter, vol. 16(2), pages 275-291, June.
    3. Tsui, Wai Hong Kan & Fung, Michael Ka Yiu, 2016. "Analysing passenger network changes: The case of Hong Kong," Journal of Air Transport Management, Elsevier, vol. 50(C), pages 1-11.

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