Financial Devices, Markets and Instruments Essay

EF3333

Economic Systems, Marketplaces and Devices

Mini-project 1

Group List

Fung Chin Wang 52598931

Liu Wai Ho 52592350

Lin Yuen 52593960

Chan Kwok Leung 52610309

Group List

Fung Chin Wang 52598931

Liu Wai Ho 52592350

Lin Yuen 52593960

Chan Kwok Leung 52610309

Content

The Asian financial crisis in 1997…………………………………………………….. ……. ……P. 3

08 financial Tsunami………………………………………………………………….. ……………P. some

The Hong Kong Stock market ………………………………………………………………………P. 7

The Hong Kong house market…………………………………………………………. ………P. 10 Summary …………………………………………………………………………. …………. ……………P. 12-15

Interest rate

The eye rate is definitely the consideration in the borrower to pay the money, the lender intended for the return.

Consumers will prefer the show make intake more than foreseeable future consumption options for lenders to loan funds to stop the existing client. The interest rates are consumer lender postpone compensation, the borrower early on consumption costs.

Under the connected exchange price system, the Hong Kong interest rate movements need to par with all the United States.

In year 1994, economist Paul Krugman printed an article criticizing the " Asian economic miracle" argument. He believes that economical growth in East Asia is a long time to increase capital investment framework. However , the growth of total factor efficiency is actually little. Krugman is convinced that only the whole factor productivity growth may bring long-term prosperity, rather than capital investment. Krugman himself confessed that this individual did not anticipate the problems, but as well did not anticipate the depth.

The collapse of the reasons there is a argument. Thailand's overall economy due to the " hot money" into a bubble; bubble development process requiring money. The same situation occurred in Malaysia and Indonesia, the specific situation in these two places is far more complicated as a result of existence of crony capitalism. The mid-1990s, Thailand, Philippines and Southern Korea inside the private sector has a large current account shortfall, fixed costs to maintain encourages outward debtors and result in financial and industrial businesses to bear the extra foreign exchange risk.

The mid-1990s, a series of situations has an impact on the economy: the devaluation of the Yuan and the yen, rising U. S. rates of interest and thus a stronger U. S. dollar, the semiconductor prices of dips, these kinds of affect their very own economic expansion. When the U. S. economy recover from the recession in the early nineties, Greenspan's Federal Reserve commence raising interest rates to deal with inflation. Compared to South Asia has been larger short-term interest levels to attract sizzling money, that makes the United States for being more attractive investment destination than any other Asian countries, which in turn inflated the significance of the dollar. For economic anchor dollar South Parts of asia, the higher dollar makes their particular exports more pricey, and loss of international competitiveness. Meanwhile, inside the spring of 1996, the South Oriental country's foreign trade growth is usually expected to significantly decline, amplified by their saving account.

The Hard anodized cookware financial crisis in 1997

Hk implement associated exchange charge system as October seventeen, 1983. Hong Kong's connected exchange rate system is a set exchange rate regime. Underneath the linked exchange rate system, the Hk dollar peg to HASTKRAFTER $ 7. 80 to U. T. $ 1 exchange level with the U. S. buck. Under the associated exchange level system, the exchange level stability, mostly through Hong Kong's three note-issuing financial institutions (Bank of China, Hong Kong and Shanghai in china Banking Company, Standard Chartered Bank) arbitrage activities come to a self-regulating mechanism, to get called.

From 97 to 98 for the emerging countries in Asia is the most unpleasant year. This coming year, most of the time, the eyes of the world invest in the appearing markets in Asia. George. Soros wonderful operation from the Quantum Pay for, led by international speculators from May against the baht attack and opened a...

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