The results obtained from the panel dataset confirm these findings, but in addition show a statistically strong association between financial sector-specific capital controls and lower FX borrowing. Specifically, An increase in the composite financial sector-specific controls index, Fincont2, from the 25th percentile to the 75th percentile is associated with about an 11 percentage points reduction in the proportion of FX-denominated lending. This result is also plausible because when banks borrow abroad, they typically do so in foreign currency. Therefore, capital controls that impede external borrowing, combined with limits on banks' open FX positions, will also tend to reduce foreign currency lending by banks.