...1 Overview of the task4 1.2 Report purpose and structure4 2. Australian economy5 2.1 Introduce stimulus package 5 2.2 Government’s guarantees 5 2.3 Mining Boom5 3. Australian economic growth6 3.1 Investment of mineral resources 6 3.2 China’s economic development6 3.3 Low interest rates6 4. Australian economic vulnerabilities (weaknesses)7 4.1 Crisis in banking sector of European and United States 7 4.2 Development slowdown in China7 4.3 Global Climate 7 5. Recommendation8 5.1 Recommend and supporting reason8 Reference List9 Executive Summary The purpose of this report is to explore and analyse the topic of ‘Australia’s economic growth relies on Asia’s continuing demand for resources’. This has been done by finding Australian economy, Australian economic growth and the vulnerabilities of its economy. This report has found out that Australian economy able to cope crisis because of the stimulus package, government’s guarantees and mining boom. For the growth of demand in mineral resources are affected by the investment, China’s economic development and low interest rates. Nevertheless, there’re several vulnerabilities of Australian economy which are slowdown in China, crisis in European and US and the climate. The report recommends that diversify its industries and export markets will be the best way to reduce its vulnerabilities on Asian demand. 1. Introduction 1.1 Overview of...
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...Risk Management in the Asian Banking Sector “What is the best strategy for the implementation of Enterprise Risk Management in the banking sector of the highly expansive but volatile Asian economy?” I chose to do an in-depth study of this area of risk management because as I am Australian, it is extremely important for me to start to fully understand the workings of our closest economic partner and the future of our economy which is driven by the expansive growth that is rolling through Asia. I was also intrigued into the steps needed to fully adopt a risk management system in an entity. It should be noted that the focus of this paper is on the developing region of South-East Asia and less on the more developed parts of Asia including China and Korea. Matthew Dichiera 11167674 Contents 1 – Introduction 2 – 1997 Asian Financial Crisis and effect on vision of risk management 3 – Overview of risks faced by banks in the developing Asian region 4 – Importance of Enterprise risk management (ERM) 5 – Strategies of implementing ERM and the challenges associated. 6 – Conclusion 7 – References Introduction The Asian economy is a vehicle of highly expansive growth and even higher volatility, it is an area of the economic world which must be treated with much anticipation and be viewed with excitement but also must be monitored and watched extremely carefully as was shown by the infamous Asian financial crisis of 1997. Opportunities for growth are high, which...
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...5 Abstract This paper investigates the impact of real interest rate on national saving in five Association of Southeast Asian Nations (ASEAN) of Indonesia, Malaysia, the Philippines, Singapore and Thailand. We analyze impact real interest rate to nation saving for ASEAN starting 1991-2013. Through an analysis from Excel, real interest rate is found to have significant impact on national saving during different stage of economic. Extensions using a graph reveal the impact of real interest rate in ASEAN-5 and thus mainly reflect heightened concerns to national savings amid the Asian financial crisis and the global financial crisis. Keywords: real interest rate, national saving, financial crisis 1.0 Introduction The world’s average saving rate has been declining since the first oil shock and through the early 1990s. However this trend conceals a large and increasing dispersion of saving rates, particularly among developing countries. The large heterogeneity in saving behavior is associated to country and time differences in levels of development, growth performance, and fiscal and financial policies. The level of real interest rates has once again become the focus of policy makers' concerned. To understanding the response of national saving to changes in interest rates is central to many issues in economic policy. For example, a reduction in the budget deficit would probably cause interest rates to decline. If personal saving declined as a result, the overall increase...
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...The Financial Crises in Russia and East Asia: How the World Bank can Help. 1 - Overview of Asian financial crisis On July 2, 1997, the Government of Thailand abandoned its efforts to maintain a fixed- exchange rate – the Baht had been pegged to a basket of currencies dominated by the U.S. dollar – and allowed the Baht to float. This Baht quickly depreciated, falling 18% on the first day alone. The collapse of the Thai Baht was followed by speculative attacks on other countries’ currencies (including the Indonesian Rupiah, the Malaysia Ringitt, the Philippine Peso, and the Korean Won) and to a further round of forced devaluations. The collapse of fixed exchange rates was accompanied by a series of more general financial sector crises in several of these countries. Although the precise details vary, the immediate cause appears to be a mismatch between assets and liabilities in the corporate and banking sectors (in both currency and term length) and a sharp decline in asset values. These immediate problems were exacerbated by general financial sector weakness due to inadequate supervision and rampant insider lending. In many ways the crises in Asia were somewhat different than previously observed exchange rate crises. Corsetti, Pesenti and Roubini (1998) note that several of the usual indicators of a pending financial crisis – slow growth, large fiscal deficits, high rates of inflation and low savings and investment rates – were not observed in these...
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...| Asian Crisis of 1997 | | | Prepared by:Azra Becirovic and Sanela Bilalic | | April 21, 2012 | Long before Asian financial crisis has started, South Korea, Thailand, Indonesia, and Malaysia had an increasing economic performance; economy was fast growing, saving rates were high, and inflation low. Turning point in Asian economy was 2 July 1997, the day when Thai Baht fell around 20 % against the $US. “It all began in Thailand’ summarizes the conventional explanation of the early stages of the crisis.” (Hill, p.3) How it all began, what factors caused the crisis, what segments were affected the most, what was the backup plan, and what policies should have been taken to prevent the crisis are the points that this paper will cover. First and Second-Generation Models According to 1996 annual report of Bank for International Settlements (BIS), pre-crisis fundamentals exhibit economic performance of Asian countries. They’ve experienced moderate inflation rates of about 6%, high savings rate of 32%, and trade openness indicators of 39%. Table 1: East Asian Economic Conditions Before Crisis Although accounting and macroeconomic analytics have failed to foreseen the currency crisis, which is inevitable, first and second-generation models explain us was it due to weakening macroeconomic fundamentals or financial contagion. In accordance to first-generation model developed by Krugman 1979, market-speculative movements, in response to policies, are incompatible...
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...FINS2622 – Emerging Capital Markets Assignment Derivatives Market in Asian Countries 2 An Overview The purpose of this report is to examine the following; to discuss the derivatives markets in Asian economies whilst simultaneously discussing the benefits and risks posed by these markets to their financial systems. In conclusion, I will propose a set of specific policy actions/recommendations aimed at reducing these risks. Growth in emerging markets has been due to several factors including privatizations, participation of foreign institutional investors, increase in the domestic investor base, and increased IPOs. In a nutshell, economies are taking steps to lowers the cost of capital to spur economic activities by fast-tracking financial market development. If those points stated were considered the first generation, emerging markets now find that they need to focus on the second-generation capital market development issues. These can be stated as: developing financial intermediaries that have professionals with financial sector skills; enhancing domestic institutional investor base with financial sector skills, enhancing domestic institutional investor base in addition to foreign investors, providing self-regulatory organization and developing mechanisms for investor protection (Fratzscher 2006). Derivative Products in Asia There are five main derivatives products that are traded in Asian markets; foreign exchange products, interest rate derivatives, equity derivatives...
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...i ACFI 2005 : Finance - Tutorial Solutions Tute 1: 07/09/12 Chapter 1 A modern financial system: an overview 2. (a) Discuss the role of money in a financial system. • Money is a financial asset that facilitates financial and economic transactions. • Money is a medium of exchange—swapped for goods and services. • Money is a store of value—wealth is held or measured in money terms. • Money is a standard of deferred payment—used to record indebtedness. • Money is a unit of account—transactions are priced in money terms. • Currency is generally divisible, portable and durable. (b) Does money have to be currency? If not, what are some alternatives? • Money is anything that is universally acceptable as a medium of exchange. • Further, money generally has the characteristics of being divisible and a store of value. • Examples—currency, EFTPOS and digital money. 4. The major financial institutions within the international markets fall into five classifications. Identify and briefly explain each of these classifications. Give an example of different types of institutions that operate within a classification were appropriate. • Depository financial institutions—they attract savings from depositors and investors and provide loans to borrowers. Examples: commercial banks, building societies and credit unions. • Contractual savings institutions—there liabilities (sources of funds) are contracts that generate periodic cash flows, such...
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...The Asian Economic Crisis The Asian Economic Crisis of 1997 was a regional debacle that stirred and involved practically the rest of the world. It was a unique economical situation that no one expected or suggested. The southeastern Asian countries, such as Thailand, South Korea and Indonesia were financially sound and satisfied all the criteria that economists proclaimed necessary to maintain order and progress. However, economists and the rest of the world did not see the breaches in the economy and realize the affect those considerations would have in the exacerbation of an entire region. The purpose of this essay is to explain what the Asian Economic Crisis was, the causes, consequences, and how the world went about resolving the issue to bring this region to where it is today. The 1990s was a decade of enormous growth in Southeast Asia sustained by its exporting (Noble, 1). It was commonly known as the Asian economic miracle. Macroeconomic balances were relatively steady and inflation was under control in these Asian countries, like Thailand, Indonesia and Singapore. Because of the major progress and developments in these countries, it became an attractive location for foreign investment. Technology had reached a new brink, where people could invest internationally without having to leave the country and establish a huge investment abroad. Trading through the internet was easy, efficient and convenient. Capital Inflow into these countries was inundating the...
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...economic situation is still very strong, but has been in a slow and pretty steady decline caused by the Asian financial crisis and the recession. We learned they are a typical high context culture with strict rules, and long decision times. As well they are a technologically advanced culture with good infrastructure. To look at the relation of our product in the market we used the diamond analysis. This showed that Japan has a great work force, and good access to relating and supporting industries. There is also an established demand for potato chips, but seems to be a gap in the market that Tayto could exploit. The SWOT took a much closer look at Tayto and determined that even though it has a strong presence in Ireland and the UK it is still not a huge global player. It also pointed out some cost cutting opportunities, via FDI and further emphasised the large population as an opportunity for Tayto it also made clear that competition in the snack industry is everywhere, and the costs of setting up a business via FDI could be very high. Finally we drew the conclusion that given all the positive and negative aspects, Japan posed much too good a market to pass up. It was recommended that Tayto engage in an exportation strategy to minimize risk and cut initial costs. Table of Contents Academic Integrity 2 Executive Summary 3 Introduction 6 Company Overview 6 Country Overview 6 PEST Analysis 7 Political Analysis 7 Role of the Government 7 Legal System 8 Economic...
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...An Overview of the Malaysian Banking Sector FINA0501 ASIAN FINANCIAL INSTITUTIONS TERM PAPER LEE JUNHONG, JEREMY 2010540826 I. Introduction Malaysia has been an important player in the Asian economy since the early days of independence, and even before that, as a British protectorate. It is currently the third largest economy in Southeast Asia, and is the 28th largest economy in the world in terms of purchasing power parity according to the World Bank. Malaysia has also successfully diversified its role by focusing her economy on both the traditional sphere of primary agricultural produce as well as being a hub for light manufacturing in consumer durables and electronics. Strong economic planning and farsighted vision by both the government and central bank has been instrumental in maintaining a strong growth rate of her economy; her combined year on year growth since independence in 1957 has averaged 6.6%, which is no doubt a stellar record and one of the highest in Asia. The financial institutions and their functions have been instrumental in this success, and this paper will strive to highlight the strengths and weaknesses, as well as a general overview of the Malaysian banking sector. I. Historical background The earliest beginnings of the banking sector in Malaysia dates back to the early 19th Century under British influence and the expatriate (mainly British) merchant communities. The Straits Settlements comprising of Singapore, Malacca and Penang were administered...
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...Table of contents Introduction 2 Country Overview 2 The Political Environment 3 Recent History 3 The Present Government 3 Political Stability 4 Opposition Parties 4 Economic and Financial Analysis 5 Trade History & Major Products 5 GDP Growth per capita 5 Unemployment & Price level Changes Inflation 6 Exchange Rate Innovations 7 Investments in the Stock Market 7 Investments in the Bond Market 8 Foreign Exchange Reserves 9 Structure of Industries 10 The Banking System 10 Monetary Policy / Money Supply Growth 11 Foreign Debt 12 Capital Flight 12 Asian Currency Crisis 13 Philippines before the crisis 13 What caused the Asian Currency Crisis? The effect it had on the Philippines and other countries 13 Looking into the Future 17 Prevention as the Best Form of Management 17 Some Policy Lessons From the Asian Crisis 17 Need for Great Caution About Financial Liberalization and Globalization 17 Manage External Debt Well and Avoid Large Debts 17 Manage and Build Up Foreign Reserves 17 The Need for Capital Controls and a Global Debt Workout System 18 Conclusion: Summary / Comments / Recommendations 19 Works Cited 21 Appendix A 23 Appendix B 24 Appendix C 25 Appendix D 26 Appendix E 27 Appendix F 28 Introduction The Philippines were ceded by Spain to the US in 1898 following the Spanish-American War. They attained their...
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...natural resources, and because of their natural resources, it helps Australia to show a great performance in economic sector (Das, 2012). Australia’s economy activity keeps increasing, also added by the amount of demand for exports from China. With the large demand of exports from China, it proposes new opportunity in diversifying trade relations from European Market. Unfortunately, Australia is too depending itself on Asian demand. If decreases happen in demand from China, it will affect headline GDP growth. From now on, the intention of this discussion is to Australia’s economic growth, which relies on Asia’s continuing demand for resources. Nowadays, Australia’s growth is really depending itself to china’s demand. Plumb, Kent, and Bishop (2012) mention that the boom in the resource sector is one of the sectors that got an effect from strong growth in Australia. Plumb, Kent, and Bishop (2012) say that there are three overlapping phases that this boom has. But he believes that someday the demand for commodities will be easier because development of economies in the Asian region will shift from goods to services. Some Australian service industries also got increase highly because of demand from Asia (Plumb, Kent, and Bishop, 2012). Plumb, Kent, and Bishop (2012) take this as an advantage...
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...RESEARCH PAPER 99/14 11 FEBRUARY 1999 The Asian Economic Crisis This paper considers the economic crisis that began in the financial markets of South East Asia in 1997 and the consequences for the economies of the region and the rest of the world. The paper provides a chronology of and explores the factors that led to the crisis. An overview is given of the policy measures that the international financial institutions (IFIs), such as the IMF, have taken to deal with the crisis. Some of the arguments and policy proposals made to try to avoid future crises are also covered. Eshan Karunatilleka ECONOMIC POLICY AND STATISTICS SECTION HOUSE OF COMMONS LIBRARY Recent Library Research Papers include: 98/119 98/120 99/1 Unemployment by Constituency - November 1998 Defence Statistics 1998 The Local Government Bill: Best Value and Council Tax Capping Bill No 5 of 1998-99 16.12.98 22.12.98 08.01.99 99/2 99/3 99/4 Unemployment by Constituency - December 1998 Tax Credits Bill Bill 9 of 1998-9 The Sexual Offences (Amendment) Bill: 'Age of consent' and abuse of a position of trust [Bill 10 of 1998-99] 13.01.99 18.01.99 21.01.99 99/5 99/6 99/7 The House of Lords Bill: 'Stage One' Issues Bill 34 of 1998-99 The House of Lords Bill: Options for 'Stage Two' Bill 34 of 1998-99 The House of Lords Bill: Lords reform and wider constitutional reform Bill 34 of 1998-99 28.01.99 28.01.99 28.01.99 99/8 99/9 99/10 99/11 99/12 Economic Indicators Local Government...
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...Managing Change BUSM 1208 Overview The SingTel Group (SingTel), the incumbent former monopoly, is Asia’s leading communications group, providing a diverse range of communication services and solutions including fixed, mobile, data, internet, info-communications technology, satellite and pay TV. With 130 years of operating experience, SingTel has played an integral part in the development as a major communications hub in the region (SingTel 2011). It has operations and investments in more than 20 countries and territories globally, primary in communications companies beyond Singapore’s border. Exhibit 1 shows SingTel’s investments in various regions. Today, SingTel is listed on the Singapore Exchange, and also the Australian Stock Exchange with the acquisition of Optus in 2001 (Sainsbury 2005). Being the largest company listed on the Singapore Exchange, SingTel had a market capitalization of S$50 billion, and had a turnover of S$16.87 million and net profit after tax of S$3.91 million for the year ended March 2010 (Singapore Telecommunications Limited 2010) as shown in Exhibit 2. Despite enduring a global financial crisis, SingTel is still ranked the top mobile service provider and national telephone provider in its home base, with a market share of 44% and 86% respectively (SingTel 2010). History of Singapore’s Telecommunications Industry SingTel’s heritage could be traced back to 1879, when Singapore became one of the first cities in the East to have telephone service (SingTel...
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...1997 East Asian Financial Crisis by Zara Ahmed Julia Dreier Frank Ro April 9, 2007 FSPP 556: Macroeconomics Professor Kathryn Dominguez [pic] Introduction Following its independence in 1945, the Indonesia economy deteriorated drastically as a result of political instability, a young inexperienced government, and ill-disciplined economic nationalism. However, the New Order administration in the 1960s, brought about a new degree of discipline to economic policy that quickly brought inflation down, managed foreign debt, but more importantly, attracted foreign investment through financial liberalization. As massive inflows of foreign investment poured into the country, problems soon arose with regulation and oversight. These structural weaknesses created instability and ultimately multiplied the effects of the Asian Financial Crisis in 1997. With strong encouragement of the IMF, Indonesia adopted a set of policies to protect currency values and penalize insolvent companies, in order to restore investor and creditor confidence in the country. Despite assistance from the International Monetary Fund, the Crisis devastated the Indonesian economy and brought on massive social unrest. This paper consists of six parts. We intend to analyze pre, during, and post-crisis trends utilizing such macroeconomic models as the Mundell-Fleming model, the IS-LM model, and the open economy model for calculating exchange rates. First we provide a brief overview of the...
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