Critical review

Essay by orangeskyeeUniversity, Bachelor's April 2004

download word file, 2 pages 3.7

Downloaded 56 times

According to Michael Hasenstab, China has entered a completely new stage in

building securities markets. He pointed out that policy innovations have very

useful promotion for it.

The author states that a well functioning government bond market are crucial

for central bank's execution of monetary policy and can provide the capital

market with much of information mentioned many aspects. And besides, he explain

opposition of efficient or function markets which would be likely to seriously

restrict China's growth in economy. He also argue that the influence would be

brought by inefficient domestic capital market. Consequently, he refers to

assess debt and equity market behaviour even taking a table to illuminate this

issue. In this section, the author specifically mentions Chinese stockmarket

behaviour under the circumstances of equity market. He simultaneously asserts

China was to open its capital market when its market should remain efficient,

that could be appear efficiencies in the allocation of capital.

In the latter part of the article, the author specialize eight aspects of

possible policy to explain that they would be policy innovations to develop

these markets efficiently.

It is of great issue that the author notes ignores some details. In my opinion,

the study on efficiency of financial market can be analysed in terms of two,

first, the financial market's own operation ability , Second, the financial

market transports the function ability to oppose economic development. The

operation of the financial market is its foundation to economic function

efficiency. It can be analysed from four aspects as follows: in the first

place, reflection sensitive degree to all kinds of information of financial

commodity price on the market; in the second place, the price of all kinds of

goods has inherent mechanism of stabilizing the equilibrium on the financial

market; furthermore, the quantity of financial...