The improvement in ratings is underpinned by emerging-market governments' strong external balance-sheets (record levels of foreign-exchange reserves and falling external debt ratios).
However, most global trade, Asia's external debt, foreign-exchange liquidity and financial assets are still denominated in dollars.
Attempts to defend pegged exchange rates with external financial support seldom work.
This suggests that most of the trade in foreign exchange is directed to settle external trade balances, rather than for speculative reasons.
Although many big emerging markets have built up foreign-exchange reserves and cut their external debts, in eastern Europe reserves have been flat, external debts have risen and current- account deficits have grown considerably in the past decade.
This is the value of an exchange-rate peg in an economy such as Hong Kong's: adjustment to external shocks takes place through changes to domestic prices, rather than through exchange-rate levels.
The more rigid wages are, the greater the need for a flexible exchange rate to help the economy respond to an external shock.
Milton Friedman and others reminded us decades ago that such internal adjustments necessary to reverse an external deficit were ultimately the same under a gold standard, flexible exchange rates, or some hybrid exchange rate regime.
Due to its inability to pay its debts and a mutual desire to keep Greece in the eurozone, Greece has had to accept various external conditions from the EU regarding its budget and national economic policies in exchange for forbearance and additional capital.
As with an external deficit, adjustment to a related internal deficit is ultimately the same under any exchange rate regime.
There are external audiences as well, however, including the companies that will be listed on the exchange.
FORBES: A Boat Both Deutsche Boerse and Nasdaq Have Missed in the NYSE Euronext Competition
An external spokeswoman for Aussino said the company had no comment beyond its statement on the Singapore Exchange's decision.
WSJ: Singapore Stymies Myanmar Mogul Zaw Zaw's Bid for Listing
So far, despite a much weaker exchange rate this year, the UK has made little progress in addressing its external imbalances.
International equity investment managers long complained to me that the foreign exchange arrangements my public pension clients entered into with their custodians, which forced external money managers to settle such transactions with the custodian resulted in poor execution and diminished international equity performance.
FORBES: Pensions Demand Return of Global Custodian Bank Overcharges
The Public Company Accounting Oversight Board (PCAOB), an independent agency of the Securities and Exchange Commission (SEC) created by SOx, develops those auditing standards and regulates external auditors of public companies.
There is always a tension between having a common means of exchange, a useful and good thing, and having to have the same interest rate, the same external currency conversion rate, not necessarily a good thing.
应用推荐