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Impect: An appreciating RMB will impact the Hong Kong economy in direct and indirect ways.

Indirectly, it spurs capital inflows into Hong Kong, drives down local interest rates, creates an accommodative monetary environment and yields substantial wealth effects from a surging stock market when economic and corporate profit growths are still robust. Accordingly, domestic investment and consumption are boosted when the stock market rises for a fourth consecutive year, shifting the main growth impetus inward and augmenting the sustainability of rapid growth.
壞處: 1.國家的外匯儲備隨著升值幅度多少,相應損失。 2. 不利出口。出口型企業產品的競爭力將減弱,尤其是初級產品出口。 3.會一 定程度的影響我國的勞務輸出,很小程度的影響外國投資(同樣的投資會因為人民幣升值而增加投資成本)。 4.因人民幣升值,增強了人民 幣的購買力,會導致進口增加,縮小我國的貿易逆差額。(這正是我們需要的)5。銀行壞賬上升,帶來失業問題,FDI(外國直接投資)下降,農 村地區發生通貨緊縮,人民幣的對外作用削弱,中國對 WTO 的承諾難以實現,進而帶來東南亞地區的金融不穩定,以及亞洲經濟的放緩。 6.吸引外資能力減弱而會有更多的國內企業走出去,到國外去投資建廠。

Baring:Internal control

Leeson doubled as both the floor manager for Barings' trading on the Singapore International Monetary Exchange and head of settlement operations. In the latter role, he was charged with ensuring accurate accounting for the unit. The positions would normally have been held by two different employees. By allowing Leeson, as trading floor manager, to settle his own trades, Barings short-circuited normal accounting and internal control/audit safeguards. In effect, Leeson was able to operate with no supervision from London—an arrangement that made it easier for him to hide his losses. People at the London end of Barings were all so know-all that nobody dared ask a stupid question in case they looked silly in front of everyone else. Some people raised eyebrows about Leeson's activities but were ignored. consequence of a failure of management and other internal controls of the most basic kind

The need for improved communication at all levels (and also between all levels) of management, as well as increased efficiency in the application and interpretation of rules, principles and procedures, will be considered. The Basel Committee categorized into five groups, types of control breakdowns which are characteristic of ailing banks and these are as follows: Lack of adequate management oversight and accountability, and failure to develop a strong control culture within the bank - The absence or failure of key control structures and activities such as segregation of duties, approvals, verifications, reconciliations and reviews of operating performance Inadequate communication of information between levels of management within the bank – particularly the communication of information to higher ranked officials (senior management) - Inadequate or ineffective audit programmes and monitoring activities. Risk Management :The term Operational Risk Management (ORM) is defined as a continual cyclic process which includes risk assessment, risk decision making, and implementation of risk controls, which results in acceptance, mitigation, or avoidance of risk. ORM is the oversight of operational risk, including the risk of loss resulting from inadequate or failed internal processes and systems; human factors; or external events. Advice for baring Management teams have a duty to understand fully the businesses they manage. Responsibility for each business activity has to be clearly established and communicated. Relevant internal controls, including independent risk management, have to be established for all business activities Clear segregation of duties is fundamental to any effective control system.

The governments of European nations and the USA also raised the capital of their national banking systems by $1. it reactivated the dollar swap line with Federal Reserve support. U. During the last quarter of 2008. by purchasing newly issued preferred stock in their major banks.3)Thirdly. in world history.S. By creating $600.2008 Financial tsunami Government : Governments have enacted large fiscal stimulus packages.000.S. The U. asset purchases. This was the largest liquidity injection into the credit market. these central banks purchased US$2. The ECB has announced a series measures aimed at reducing volatility in the financial markets and at improving liquidity:1)First. and direct spending. allow insolvent banks and financial institutions to fail. In other words. These included Lehman Brothers. Concerns that investment bank Bear Stearns would collapse in March 2008 resulted in its fire-sale to JP Morgan Chase.000. The bonds will be backed by guarantees given by the European Commission representing the whole EU. Governments have also bailed out a variety of firms. Merrill Lynch. executed two stimulus packages. and the IMF. totaling nearly $1 trillion during 2008 and 2009. it announced two 3-month and one 6month full allotment of Long Term Refinancing Operations (LTRO's). . The financial institution crisis hit its peak in September and October 2008. the eurozone member states. and the largest monetary policy action. incurring large financial obligations. and financial systems as much like those of the United States and Europe as possible. Washington Mutual. were acquired under duress. guarantees. by borrowing and spending to offset the reduction in private sector demand caused by the crisis. Federal Reserve was implementing another monetary policy —creating currency— as a method to combat the liquidity trap. The SAPs called on crisis-struck nations to cut back on government spending to reduce deficits. tying the packages to reforms that were intended to make the restored Asian currency. banking.5 trillion of government debt and troubled private assets from banks.2)Second. Impact: Over 100 mortgage lenders went bankrupt during 2007 and 2008. Fannie Mae. Several major institutions eitherfailed.000 and inserting this directly into banks the Federal Reserve intended to spur banks to finance more domestic loans and refinance mortgages. Impact:出口 Asia Currency crisis: The IMF created a series of bailouts ("rescue packages") for the most affected economies to enable affected nations to avoid default. 2010 Europe debt crisis( solution) In order to reach these goals the Facility is devised in the form of a special purpose vehicle (SPV) that will sell bonds and use the money it raises to make loans up to a maximum of €440 billion to euro-zone nations in need. the IMF's support was conditional on a series of drastic economic reforms influenced by neoliberal economic principles called a "structural adjustment package" (SAP). and AIG. Freddie Mac. or were subject to government takeover. government agencies have committed or spent trillions of dollars in loans. Wachovia. it began open market operations buying government and private debt securities. The EFSF will be combined to a € 60 billion loan coming from the European financial stabilization mechanism (reliant on guarantees given by the European Commission using the EU budget as collateral) and to a €250 billion loan backed by the IMF in order to obtain a financial safety net up to € 750 billions.5 trillion.

these efforts will enable Hong Kong to become a leading regional center in derivative. Hong Kong can play a useful role to become the global offshore RMB center to help facilitate the flow. Second. Executive compensation the current complaints focus on two issues: executives are paid too much. penalize insolvent companies. including financial institutions. This may in part reflect CEOs’ ability to game the system. developing Hong Kong as the global offshore Renminbi center.and aggressively raise interest rates. Over time. 動用外匯儲備近 1200 億港元(約 150 億美元)大量購入港股,結果炒家在 8 月 28 日期貨結算日被迫以高價平倉,損失嚴重,加上在 俄國和馬來西亞同時受挫,最終炒家撤退。在此一役,香港政府動用了大量外匯儲備投入股市,一度佔有港股 7%的市值,更成為部分 公司的大股東,一旦股市下挫聯繫匯率將有可能崩潰。所以到 1999 年 11 月,港府把購買的港股以盈富基金上市,分批售回市場。 此危機迫使除了港幣之外的所有東南亞主要貨幣在短期內急劇貶值,東南亞各國貨幣體系和股市的崩潰,以及由此引發的大批外資撤 逃和國內通貨膨脹的巨大壓力 IFC(HK REACT) First. Recently.Less clear is evidence about the link between executive compensation and performance. there will be more RMB in circulation outside of the mainland of China. As China allows trade to be settled in its currency. The reasoning was that these steps would restore confidence in the nations' fiscal solvency. I believe more Chinese enterprises will choose to establish overseas headquarters in addition to their existing China-based headquarters-Hong Kong. increase the shareholders’ rights to elect directors and to express their views on compensation plans. want to become more global and to adopt international best practices. Hong Kong should support the increasingly global footprint and management needs of Chinese enterprises.. Third. increase the capacity and function of its capital markets. and attract greater number of foreign enterprises to be based in Hong Kong. to discourage gaming and align incentives more closely with the aims of the owners. It will have the added advantage for the Chinese enterprises to attract and retain global talents as Hong Kong’s compensation level and structures are closer to the developed markets of the world. Many Chinese enterprises. Hong Kong should further enhance its services in non-RMB based products. Hong Kong has been designated as one of the five cities that can do trade settlement in RMB. Before the RMB becomes fully convertible. or even the perverse effects of incentives that promote dysfunctional behavior. and protect currency values. The solutions offered for the problems of excessive levels of executive pay and the need to strengthen the link between pay and performance often hit on the same themes: strengthen the independence of directors and compensation committees. It is also tempting to suggest that these problems can be solved by better compensation schemes or improved techniques to link CEO pay to stock performance. Hong Kong will remain the dominant center for China’s non-RMB denominated cross-border transactions. develop a deeper bench of China-facing market participants. it is imperative that Hong Kong plays a significant role in Renminbi financial services. Hong Kong must utilize this precious window of 10 years to aggressively expand China focused non-RMB denominated businesses. As the Renminbi is fast becoming the second largest currency in the world. . and current incentive-pay schemes are flawed because the connection between executive pay and company performance is mixed at best—and at worst has led to a series of dysfunctional behaviors. The most comprehensive survey examining the link between CEO pay and performance found that changes in firm performance account for only 4 percent of the variance in CEO pay.