scholarly journals Not All Currency Traders Believe in Unfettered Free Markets: Currency Speculation and Market Intervention in Hong Kong

2002 ◽  
Vol 170 ◽  
pp. 441-458
Author(s):  
Leong H. Liew ◽  
Harry X. Wu
Keyword(s):  
Hong Kong ◽  
Financial Markets ◽  
Financial Institutions ◽  
Futures Markets ◽  
Government Intervention ◽  
Free Market ◽  
Asian Crisis ◽  
Monetary Authority ◽  
Free Markets ◽  
Market Intervention

Expectations and beliefs are important forces that can influence financial markets. Using results from a survey, this article examines the beliefs of currency traders in Hong Kong's financial institutions regarding the RMB and HK$/US$ pegs. In particular, it examines the attitudes of these currency traders towards the intervention by the Hong Kong Monetary Authority (HKMA) in Hong Kong's stock and futures markets to defend the HK$/US$ peg during the Asian crisis in 1998. Contrary to expectation, not all currency traders in Hong Kong were diehard devotees of the free market and more were in support of the intervention than against. Degree of identification with Hong Kong was found to be important, influencing attitudes towards government intervention. An inference from the survey is that the intervention was popular with Hong Kong residents and that future intervention by the HKMA is likely if faced with similar speculative attacks on the HK$.

Liberalism, Republicanism, and Finance

2020 ◽  
pp. 192-233
Author(s):  
Christopher W. Calvo
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Government Intervention ◽  
Market Competition ◽  
Alexander Hamilton ◽  
Market Economies ◽  
Early American ◽  
South Sea ◽  
Laissez Faire

This chapter surveys the historiography on Jacksonian finance, emphasizing the literary association between finance and capitalism. Much of the chapter addresses early American opposition to financial institutions, but this chapter also discusses the advocates of finance who sponsored government intervention in state and national financial markets. This chapter argues for the reorganization of the conventional dialectic between finance and capitalism, highlighting critical nuances in the literature. Besides Alexander Hamilton, few Americans accepted finance as a desirable or necessary feature of capitalism. Most Americans believed that financial institutions were anathema to market economies, or they imagined that market competition could be employed to slow or prevent entirely the spread of finance. The chapter also connects the antebellum opposition to classical republicanism traced to England’s South Sea Bubble. Early American opponents of finance combined republican and laissez-faire values to oppose the spread of finance.

Toward Asian Pacific Financial Centers: A Comparative Study of Financial Developments in Taiwan, Hong Kong and Singapore

1999 ◽  
Vol 02 (01) ◽  
pp. 29-55 ◽  
Author(s):  
Hsiao-Wen Young ◽  
Ken Hung ◽  
David C. Cheng
Keyword(s):  
Hong Kong ◽  
Comparative Study ◽  
Financial Markets ◽  
Financial Institutions ◽  
Developmental Processes ◽  
Asian Pacific

There are many societal similarities among Taiwan, Hong Kong and Singapore. However, with respect to financial developments, there is no denying that Hong Kong and Singapore score higher than Taiwan with regard to liberalization and internationalization. The financial developments of the three regions are compared retrospectively and prospectively along the lines of financial institutions, financial markets and government controls. The differences in the relative scales of the three regions' financial industries are highlighted together with a comparison of their developmental processes.

Part VII International Securities, Including Markets and Clearing Systems, 23 Hong Kong Markets and Exchanges

2021 ◽  
Author(s):  
Arner Douglas W ◽  
Gibson Evan C ◽  
Hsu Berry F C
Keyword(s):  
Hong Kong ◽  
Financial Markets ◽  
Financial Institutions ◽  
Financial Sector ◽  
Economic Downturn ◽  
International Level ◽  
Capitalist System ◽  
Basic Law ◽  
Principal Standards ◽  
Derivatives Markets

This chapter describes the main elements of the current financial sector activity in Hong Kong and the conditions under which they function. It highlights Hong Kong's financial markets and economy that have suffered an economic downturn following the 2019 protests and sustained by the Covid—19 pandemic. It also mentions how Hong Kong implements the principal standards and reforms adopted at the international level, particularly in relation to the resolution of Global Systemically Important Financial Institutions (G—SIFIs). This chapter provides an overview of the monetary, banking, equity, debt, insurance, and derivatives markets in Hong Kong. It talks about Hong Kong's de facto constitution, the Basic Law, which aids the economy in maintaining its capitalist system for fifty years from 1 July 1997.

Banking on Failure

2020 ◽  
Author(s):  
Richard S Collier
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Current Position ◽  
Tax System ◽  
Number Of Factors ◽  
Tax Systems

This book seeks to explain why and how banks ‘game the system’. More specifically, its objective is to account for why banks are so often involved in cases of misconduct and why those cases often involve the exploitation of tax systems. To do this, a case study is presented in Part I of the book. This case study concerns a highly complex transaction (often referred to as ‘cum-ex’) designed to exploit a flaw at the intersection of the tax system and the financial markets settlements system. It was entered into by a very large number of banks and other financial institutions. A number of factors make the cum-ex transaction remarkable, including the sheer scale of the financial amounts involved, the large number of banks and financial institutions involved, the comprehensive failure of the controls infrastructure in this highly regulated sector, and the fact that authorities across Europe have found it so difficult to deal with the transaction. Part II of the book draws out the wider significance of cum-ex and what it tells us about modern banks and their interactions with tax systems. The account demonstrates why the exploitation of tax systems by banks is practically inevitable due to a variety of systemic features of the financial markets and of tax systems themselves. A number of possible responses to the current position are suggested in the final chapter.

Evaluasi Komoditi Ekspor di Bandara Soekarno Hatta

WARTA ARDHIA ◽  
2010 ◽  
Vol 36 (4) ◽  
pp. 317-328
Author(s):  
Hartati Yusminah
Keyword(s):  
Free Trade ◽  
European Economic Community ◽  
Free Market ◽  
Free Trade Area ◽  
Air Transport ◽  
Transport Sector ◽  
Free Markets ◽  
Trade Area ◽  
Asian Pacific

Seeing of free trade in several continental markets such as of the establishment of the European Economic Community (EEC). The Asian Pacific Economy (Pasific Economy Community) NORTH America Free Trade Are (NAFTA), ASEAN Free Trade Area (AFTA), ASEAN free market with China is indirectly effect on determination of Indonesian strategy in exploting oppurtunities commodities what can penetrate the international market.With the opening of free markets Asean plus China which commenced in the year 2010 was the air transport sector has an important role in supporting efforts to increase exports, especially in the provision of adequate transport service.Soekarno Hatta airport is one of the airport that serves as the gates way of trade via air transport network, that plays an important role in supporting and smoth export and import of commodities.

COVID -19 and Indian Financial Markets: A Review

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Stock Markets ◽  
Global Economy ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Management Strategies ◽  
The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

Loan collaterals and collateral substitutes in rural finance: a review

2015 ◽  
Vol 11 (2) ◽  
pp. 36-56
Author(s):  
MG Maiangwa
Keyword(s):  
Moral Hazard ◽  
Financial Markets ◽  
Financial Institutions ◽  
Farm Households ◽  
Rural Finance ◽  
Traditional Methods ◽  
Limited Availability ◽  
Rural Financial Markets

Poor farm households and other microentrepreneurs have difficulties in obtaining loans from banks and other financial institutions because they are unable to provide securities or collaterals for the loans. Collaterals on loans reduce uncertainty and moral hazard problems for creditors. They also serve as a measure of the seriousness of the borrower. The limited availability of conventional collaterals in rural financial markets has led to the acceptance of non-traditional methods of loan security referred to as collateral substitutes. This paper reviews loan collaterals and collateral substitutes in the rural financial markets of developing countries.Keywords:: Collaterals, collateral substitutes, rural finance.

Market reaction to the Karachi stock exchange floor imposition

2015 ◽  
Vol 4 (2) ◽  
pp. 275-291 ◽  
Author(s):  
Saqib Sharif
Keyword(s):  
Financial Markets ◽  
Market Reaction ◽  
Stock Exchange ◽  
Price Volatility ◽  
Price Limits ◽  
Content Type ◽  
Market Intervention ◽  
Price Floor ◽  
Price Freeze ◽  
Regulatory Intervention

Purpose – The purpose of this paper is to investigate the market reaction to the decision made by the management of the Karachi Stock Exchange (KSE) to impose a price floor that resulted in trading curbs in 2008. The paper analyzes if regulatory intervention helped in restoring investor confidence. Design/methodology/approach – The paper examines the effect of enforcement of a price floor and trading curbs by splitting the time period studied into two periods: pre-floor and post-floor period. The parametric t-statistics and non-parametric Mann-Whitney test are used to compare the abnormal returns (ARs), abnormal trading volume, bid-ask spread, Amihud illiquidity ratio, and price volatility between the two periods. Event study was conducted to observe the behavior of market returns surrounding market-wide price floor. Finally, multivariate regression analysis was also applied by controlling for factors that might influence valuation, liquidity, and volatility. The standard errors have been corrected for cross-sectional clustering due to market-wide restrictions. Findings – The study found an adverse impact of price freeze and trading curb in the KSE, following the relaxation of floor (resumption of active trading). First, the price of securities (or ARs) significantly declined following the relaxation of the price freeze. Second, the market liquidity deteriorated following the relaxation of the price floor. Third, the price volatility increased in the post-floor period. It seems that the decision made by the KSE’s board to implement lower cap on prices for an extended period was ineffective. Practical implications – Market intervention by regulators to bring calm in the financial markets have negative consequences across the globe. The results presented in this paper suggest that implementing price floor brought inefficiency in the market and prevented firms from raising capital to finance their future investments. The author believe this study will add to the knowledge base of regulatory intervention and its impact on the performance of financial markets. Originality/value – There is no empirical evidence on the impact of price limits on volatility in emerging markets. The author selected Pakistan as a case study, where we particularly focus upon impact of the enforcement of a price floor around the peak of Global Financial Crisis (or market intervention) in Pakistan. This study also documents the effect of trading curb on liquidity and volatility in an emerging market, given that a majority of research on trading halt/price limits is based on developed markets.

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