Central bank

There is no denying the fact that china is economic miracle of 21st century. China is what it is because of the reforms intiated by its leadership (since 1978). Deng Xiaoping who intiated the reforms back in the 70s, described his approach as “crossing a river by feeling the stones” . Over years china has transformed itself from a hardcore socialistic economy to a socialistic market economy where investments in infrastructure has become the main pillar to generate economic growth and raise the…

the Chinese stock market affected all the Stock Exchanges in the world because of globalization of the markets. The collapse in China led to the following events, in December China sold U.S. government bonds and as a result of this may foreign central banks absorbed these bonds. China is the biggest foreign owner of U.S. Treasury debt and in December they cut $18.4 billion of U.S. government debt, according to the latest capital flows report from the U.S Treasury. The article continues and…

Reading Two: Why the Fed Is Watching China Closely Quantitative Easing (QE) is an unusual form of monetary policy where a Central Bank –in this case, the Federal Reserve – electronically creates new money, increasing money supply to enable purchasing of financial assets, such as government bonds, government securities and other securities. (“What is quantitative easing?”, 2015) When short-term interest rates are near or approaching zero, this process is used to increase the private sectors’…

The Australian government is currently trying to deflate the value of the Australian dollar against other currencies. There are number of reasons as to why they are doing so. The decline in the Australian dollar value affects many companies positively and negatively. Once compared however there are many more winners who benefit from this decision than there are losers. In order to target a lower exchange rate the RBA is easing monetary policy The Australian dollar has appreciated strongly and…

AlfaTrade account types and platforms also offering Islamic account The forex market is a large trading market involving currency trade. This fast paced market is dominated by central banks, wealthy individuals, hedge funds and other financial institutions. Advanced in technology has made it easy to trade currencies, as this can now be done online through a brokerage account. The greatest advantage of currency trading remains the facts that it is less volatile compared to commodity or share…

it had not drifted from the behavior presented by that rule, would the macroeconomic condition leading up to the great recession have turned out differently? The main purpose of discount lending is to ensure short term financial stability to prevent bank panics and the sudden collapse of financial institutions experiencing a financial crisis, such as the 2001 9/11 attacks. Discount lending was greatly increased. Also, right before the 2007-2009 great recession discount window loans amounted to…

Lebanon, related to the composition of the board of directors’ committees. In 2008, the Central Bank of Lebanon issued the circular no. 118, requesting mandatorily from all banks to establish an audit committee in their board of directors with clear measures regarding the size of the committee, the frequency of meetings, the financial expertise of its members, etc. This decision had positive impact on the banks’ corporate governance in many terms. It helped improving the internal audit work…

Linking cash transfer to Herbert Simon’s bounded rational theory (Group component): The government of India had actually three policy choices to be made - Policy 1- whether to completely go for cash transfer for all the social welfare programs (including for food distribution). Policy 2- whether to continue with the existing “in kind” subsidies and no cash transfer. Policy 3- whether to partially go for cash transfer for some benefits like scholarship, old age pension etc and continue…

The stock market has always been known as the "barometer" of the national economic growth and development, played price discovery, resource allocation of investments and other important roles in the modern economic market. With the expansion of the scale of stock markets, the impact of stock markets on economy is becoming more and more important, and the expansion or contraction of the stock prices have become an important cause of the macroeconomic fluctuations. In addition, the government…

inspires virtually all macroeconomic theory. Mathematical economists depend on this so-called classical separation, or later kinds of it, to forecast the belongings of economic policy. Assume a macroeconomist is reviewing monetary policy from a central bank, such as the Federal Reserve. When the Fed involves in open market operations, the macroeconomist does not accept that variations in the money supply will variation future capital equipment, employment stages or actual wealth in long-run…