BOFIT, Suomen Pankki Comments on "The International Transmission of Shocks: Foreign Bank Branches in HongKong during Crises” by Simon Kwan, Eric.T.C. Wong and Cho-hoi Hui Conference on China’s Financial Intermediation City University of Hong Kong, Laura Solanko

Suomen Pankki – Finlands Bank – Bank of Finland The paper in short  Uses bank branch level data 2004m1-2012m12 – Foreign bank branches, N=89, T=108 – Balance sheet data on loans, deposits and liquidity position as well as net due to banks/offices overseas  Analyses changes in each variable between periods of shocks and of relative calm  Analyses differences with respect to the country of origin of the bank  No evidence on liquidity hoarding by foreign branches in HK…  But foreign branches from crisis countries lend less than other foreign bank brances Laura Solanko2

Suomen Pankki – Finlands Bank – Bank of Finland Some reflections …  Methodology – OLS with one dummy variable is not D-i-D – Are all eurozone banks equal? – Did interest rate differentials play any role?  Data – How many banks from the US / eurozone? – How do you treat UK banks? – Role of different time periods  T=6 with periods varying from 2m to 12m – Is some additional bank/branch-level data available (Bankscope?)  E.g. are all eurozone banks equal? Laura Solanko3

Suomen Pankki – Finlands Bank – Bank of Finland Some reflections, cont.  Literature – Role of foreign banks during the global finance crisis has been analysed previously  De Haas and Leyleveld 2014, JMCB  De Haas and Van Horen 2013, Rev.Financ.Stud.  Implications – What did we learn? – Are foreign banks from crisis countries a large share of HK banking industry? – How did foreign bank branches behave relative to domestic banks? Laura Solanko4