One key function of the Hong Kong Monetary Authority (HKMA) is to promote the stability and integrity of the financial system in Hong Kong. There are about 200 authorized institutions (AIs) in Hong Kong, many of which are deposit taking banks. The total assets of AIs as of June 2010 are about HKD 11 trillion, 6 times as large as the latest annual GDP of Hong Kong and about 60% of the total mark...

One of the major issues associated with the short-run aggregate money demand is that the speed of adjustment has become very slow or even negative when the post-1973 periods are included in regressions. This implies that the long-run effects of income, wealth, or the opportunity costs on money demand may be so large that a small change in any of these variables would lead to unreasonably large ...

Over the last decades the research on monetary policy has largely concentrated on the impact of monetary authorities’ decisions on inflation and the fine-tuning of the macroeconomic, so that distributional effects of monetary policy which are non-trivial has been ignored. A view that has become increasingly popular since the financial crisis 2008 is that expansionary monetary policy can exacerb...

Financial system of B&H is “bank dominated”, which means that banks (credit institution) is dominated financial institutions in the financial system. Banks have major role in financial intermediation process between deficit and surplus money unites. Having on mind specific features of financial systems in Bosnia and Herzegovina it’s important to analyses characteristics each segment of fi...

A common perspective in macro-finance analyses links firms’ borrowing constraints to the liquidation value of physical assets firms pledge as collateral. We empirically investigate borrowing by non-financial firms in the US. We find that 20% of corporate debt by value is collateralized by specific physical assets (“asset-based lending” in creditor parlance), while 80% is based predominantly on ...

With the growing use and financial importance of the Internet, cyber criminals increasingly perceive computer systems, network architectures, and databases storing transactionand personal-related data as assets and profitable targets. As illicit activities have become more organized and monetary-driven, a digital underground economy for hacking-related goods and services has evolved. In this pa...

This paper provides a framework to analyse emergency liquidity assistance of central banks on financial markets in response to aggregate and idiosyncratic liquidity shocks. The model combines the microeconomic view of liquidity as the ability to sell assets quickly and at low costs and the macroeconomic view of liquidity as a medium of exchange that influences the aggregate price level of goods...

This paper o¤ers a monetary theory of asset liquidity— one that emphasizes the role of assets in payment arrangements— and it explores the implications of the theory for the relationship between assets’ intrinsic characteristics and liquidity, and the e¤ects of policy on asset prices and welfare. The environment is a random-matching economy where risk-free bonds coexist with a risky asset, equi...