Reducing reporting risk: Designating foreign currency forward contracts as cash flow hedges

We present an example that compares the effects on earnings of designating a foreign currency forward contract as either a cash-flow or fair-value hedge of a foreign currency denominated receivable. Entities engaging in exchange transactions not denominated in their functional currency frequently enter into foreign currency forward contracts in order to mitigate their foreign exchange rate risk exposure. The aggregate effect on earnings of the transaction gain or loss on the foreign currency receivable and the gain or loss on the forward contract is known on the date the forward contract is initiated. The effect on each period’s earnings during the term of a forward contract designated as a cash-flow hedge is also known on the date the contract is initiated; whereas the effect on each periods’ earnings from a fair-value hedge cannot be determined until the respective balance sheet dates. Therefore, designating forward contracts as cash-flow hedges may suppress volatility in reported earnings compared to designating forward contracts as fair-value hedges. In addition, the reporting risk (the amount of uncertainty surrounding the pending measure of an item to be reported in the financial statements) is lower when a forward contract is designated as a cash-flow hedge relative to designating it as a fair-value hedge. This suggests foreign currency forward contracts designated as cash-flow hedges are more consistent with the purpose of hedge accounting: to mitigate the effects on earnings of applying different measurement criteria for the hedge and the hedged item.     

Cointegration as an explanation for the Meese–Rogoff puzzle

Some economists suggest that the failure of exchange-rate models to outperform the random walk in exchange rate forecasting out of sample can be attributed to failure to take into account cointegration when it is present. We attempt to find out if cointegration matters for forecasting accuracy by examining the relation between the stationarity and size of the forecasting error. Results based on three macroeconomic models of exchange rates do not provide strong support for the proposition that cointegration matters for forecasting accuracy. The simulation results show that while stationary errors tend to be smaller than non-stationary errors, this is not a universal rule. Irrespective of the presence or absence of cointegration, none of the three models can outperform the random walk in out-of-sample forecasting, which means that cointegration cannot solve the Meese–Rogoff puzzle.     

Turning values concrete: the role and ways of business selection in local currency schemes

Alternative consumption schemes require the selection of producers and traders according to criteria and through processes that should make alternative values concrete. The way values turn concrete is crucial for the effectiveness of such projects. This paper investigates the ways criteria and processes are defined and their real meanings and uses through the case of associative local currencies. Drawing on the framework of proximities, it analyses local currency schemes as combining proximities (geographical and non-geographical) and selection processes set up for providers wishing to join. Selection processes may be based on a charter, an approval committee and screening criteria. The objectives of the selection, its measures in principle, the way in which it is applied as well as the practical consequences are discussed. Even when charters and formal participatory schemes for selecting providers are established, proximities appear as the keystone of selection and trust.     

Flight-to-quality and correlation between currency and stock returns

We document that capital flows in and out of emerging or developed markets are sensitive to global equity market conditions. Capital tends to move out of emerging into developed countries in global down markets, leading to depreciation (appreciation) of emerging (developed) currencies. This generates a positive (negative) correlation between currency and equity in emerging (developed) markets which is amplified by the magnitude of the capital movement. We also verify that hedging currency risks may undo the natural hedge and increase the total return volatility under negative correlation.     

我国台湾地区儿童福利问题研究

儿童是社会的未来，是民族的希望。儿童福利是社会福利的重要组成部分，在经济高速发展的当今社会，福利体系的建设中儿童福利的发展与完善显得尤为迫切。笔者通过对儿童福利事业发展较为先进的台湾地区进行研究，从法律和政策、行政体系、发展趋势等几个方面进行剖析，最终分析台湾地区儿童福利发展对我国相关问题上的启发，以期对我国儿童福利体系建设起到积极作用。     

内陆开放型经济试验区引入信用评级机构的相关问题研究

信用评级具有减少信息不对称、实现社会资源优化配置、促进经济良性发展的润滑剂作用,因此,宁夏内陆开放型经济试验区引入信用评级机构十分必要。结合宁夏实际,分析信用评级机构的发展模式,认为内陆开放型经济试验区引入信用评级机构应当采取＂政府推动、市场运作、人行监管＂模式,并且引入后应从提升业务人员水平、完善监管方法、加强业务指导等方面,推动信用评级机构健康发展。     

货币信用属性演化的历史与逻辑

通过讨论主要货币起源与演化理论的矛盾与不足,从货币取得人们信任的角度,尝试整合了货币起源与演化的事实与逻辑,由此可以认为货币的本质是信用,(商品、金属)货币和纸币一样都是信用货币,货币演化是货币内涵的威权因素和物的因素相互竞争的结果;且货币制度的核心是信用。维持人们对货币的信心与币值稳定应当是任何货币调控的出发点和归宿。     

Early-warning analysis for currency crises in emerging markets: A revisit with fuzzy clustering

Currency crises, also often called balance-of-payment crises, occur when massive capital outflows force a country to devalue or float its currency. The world-wide integration of capital markets since the 1980s and 1990s has increased the degree of capital mobility, which also determined a substantial turbulence in foreign exchange markets and frequent currency crises. In this paper, we explore advanced supporting instruments for predicting currency crises, based on an empirical study of the currency crisis episodes in 23 emerging markets around the world during the second half of last century. More specifically, we investigate the usefulness of prediction models built based on the fuzzy c-means method. First we build clustering models that partition data into a certain number of overlapping natural groups. Thereafter, we classify the data clusters into early-warning clusters and tranquil clusters. We compare the performance of our models with a conventional c-means clustering model and a benchmark probit model. The results show that the proposed models achieve a similar level of out-of-sample performance as the probit model and c-means model. The fuzzy approach also introduces additional explanatory advantages into the early-warning analysis process. Copyright © 2010 John Wiley & Sons, Ltd.     

Retrospect of the Chinese Exchange Rate Regime after Reform： Stylized Facts during the Period from 2005 to 2010

In the present paper, we estimate the de facto RMB exchange rate regime, the currency basket, the floating band and the foreign exchange market pressure before and after the reform of the Chinese exchange rate regime in 2005. We find the following stylized facts： the value of the RAIB became stable after the reform; the weight of the US dollar remained high in the basket, while other currencies remained statistically significant; and the floating band gradually increased to lO percent during 2005-2008, and then greatly narrowed from the late summer of 2008 under the assumption of a yearly resetting interval. We find that the foreign exchange market pressure increased from 2005 to 2008. A possible reason is that the weight of the US dollar in the basket was slightly lower than the share of the US dollar in total transactions on the Chinese foreign exchange market. Therefore, it is reasonable for China to adopt a dollar peg exchange rate regime.     

长株潭地区失地农民权益保障现状、问题及对策

伴随长株潭城市群的发展,不可避免地产生了失地农民这一弱势群体。对长株潭地区失地农民的生活、工作、保险与医疗保障方面的现状调查与分析表明,失地农民保障存在方式单一,力度不够,内容和体系不健全,保障缺乏长远性、层次性与差异性等问题,需要采取多元化的保障方式,提高保障力度、完善保障体系等措施加以解决。