Offshore Markets for the Domestic Currency: Monetary and Financial Stability Issues
Dong He and
Robert McCauley
No 1002, Working Papers from Hong Kong Monetary Authority
Abstract:
We show in this paper that offshore markets intermediate a large chunk of financial transactions in major reserve currencies such as the US dollar. We argue that, for emerging market economies that are interested to see some international use of their currencies, offshore markets can help to increase the recognition and acceptance of the currency, while still allowing the authorities to retain a measure of control on the pace of capital account liberalisation. The development of offshore markets could pose risks to monetary and financial stability in the home economy, which need to be prudently managed. Experience in dealing with the Euromarkets by the Federal Reserve and other authorities of the major reserve currency economies show that policy options are available for managing such risks.
Keywords: offshore markets; currency internationalisation; monetary stability; financial stability (search for similar items in EconPapers)
JEL-codes: E51 E58 F33 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2010-03
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)
Downloads: (external link)
http://www.hkma.gov.hk/media/eng/publication-and-r ... HKMAWP10_02_full.pdf (application/pdf)
Related works:
Working Paper: Offshore markets for the domestic currency: monetary and financial stability issues (2010) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:hkg:wpaper:1002
Access Statistics for this paper
More papers in Working Papers from Hong Kong Monetary Authority Contact information at EDIRC.
Bibliographic data for series maintained by Simon Chan ( this e-mail address is bad, please contact ).