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APPENDICES AND BOXES Chapter 1 Appendix 1.1 Derivation of Relation between Money Growth and 14 Currency Appreciation/Depreciation Chapter 2 [Box] Central Bank or No Central Bank? A Critique of the 26 Official Case [Box] A Monetary Authority with No Government Debt 33 Chapter 3 [Box] A Hypothesis for the Hong Kong Credit Cycle 47 [Box] Hong Kong’s Monetary Muddle-Through 48 Chapter 4 [Box] The British Secondary Banking Crisis of 1973–74 and the 61 Hong Kong DTC Crisis of 1982–83: Some Striking Parallels [Box] The Liquidity Ratio — A Misleading Indicator 63 Chapter 5 Appendix 5.1 Why Interest Rates Are a Bad Tool for Monetary Control 130 Appendix 5.2 Why Amending the Liquid Asset Ratios Will Not Work 132 Appendix 5.3 Summary of Proposed Schemes 134 Chapter 6 Appendix 6.1 Official Text of the Hong Kong Monetary Stabilisation Scheme 157 Appendix 6.2 Telex Message from Monetary Affairs Branch to Bank CEOs 159 Appendix 6.3 Telexed Announcement from Hong Kong Association of Banks 161 Appendix 6.4 Letter from HSBC to All Licensed Banks in Hong Kong 162 Appendix 6.5 Standard Letters Issued by HSBC 164 Appendix 6.6 Essential Elements of a Monetary Stabilisation Programme 165 for Hong Kong viii Appendices and Boxes Chapter 7 [Box] How the Self-Correcting Mechanism Operates under the 174 New Exchange Rate Mechanism Chapter 8 [Box] Partial Convertibility versus Full Convertibility 188 [Box] The Interest Rate Agreement — Who Benefits? 192 Appendix 8.1 Simple Analytics of the HK$/US$ Linked Rate System 195 Appendix 8.2 Simple Analytics of Monetary Base Control 197 Appendix 8.3 The Effect of Floating the HK$ 198 Appendix 8.4 Effects of a Revaluation of the HK$ under the 200 Linked Rate Mechanism Chapter 11 [Box] Simplified Balance Sheets for the Exchange Fund and 232 a Typical Central Bank Appendix 11.1 Press Release from Secretary for Monetary Affairs, 242 15 July 1988 Chapter 13 Appendix 13.1 EFAC Sub-Committee on Currency Board Operations 292 ...

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