Lafarguette, Romain; Veyrune, Romain - 2021
floating exchange rate arrangements. The FXI rule addresses a market failure: the absence of hedging solution for tail exchange … rate risk in the market (i.e. high volatility). Market impairment or overshoot of exchange rate between two equilibria … could generate high volatility and threaten financial stability due to unhedged exposure to exchange rate risk in the …