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...

This study compares the performance of an old liquidity ratio (LiqR) and two new liquidity indicators, namely, liquidity creation (LiqC) and net stable funding difference (NSFD), in sending early warning signals for distressed banks. Recent evidence shows that the old indicator appears incapable...