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Optimal Currency Shares in International Reserves : The Impact of the Euro and the Prospects for the Dollar
Papaioannou, Elias - 2006
Foreign exchange reserve accumulation has risen dramatically in recent years. The introduction of the euro, greater … currencies. Making various assumptions on expected currency returns and the variance-covariance structure, we assess how the euro …-free) currency. (ii) The optimum portfolios show a much lower weight for the euro than is observed. This suggests that the euro may …
Persistent link: https://www.econbiz.de/10012466332
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Reverse Speculative Attacks
Amador, Manuel - 2016
Franc against the Euro, a decision which led to the appreciation of the Swiss Franc. The objective of this paper is to …
Persistent link: https://www.econbiz.de/10012456377
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The Dollar versus the Euro as International Reserve Currencies
Chinn, Menzie David; Frankel, Jeffrey A.; Itō, Hiro - National Bureau of Economic Research - 2024
We begin by examining determinants of aggregate foreign exchange reserve holdings by central banks (size of issuing country's economy and financial markets, ability of the currency to hold value, and inertia). But understanding the determination of reserve holdings probably requires going beyond...
Persistent link: https://www.econbiz.de/10014528426
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Dollarization of Liabilities : Underinsurance and Domestic Financial Underdevelopment
Caballero, Ricardo J. - 2000
While there is still much disagreement on the causes underlying recent emerging markets' crises, one factor that most observers have agreed upon is that contracting dollar' (foreign currency) denominated external debt as opposed to domestic currency debt created balance sheet mismatches that led...
Persistent link: https://www.econbiz.de/10012470958
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International Liquidity Management : Sterilization Policy in Illiquid Financial Markets
Caballero, Ricardo J. - 2000
During the booms that precede crises in emerging economies, policy makers often struggle to limit capital flows and their expansionary consequences. The main policy tool for this task is sterilization - essentially a swap of international reserves for public bonds. However, there is an extensive...
Persistent link: https://www.econbiz.de/10012471010
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Reserve Uncertainty and the Supply of International Credit
Aizenman, Joshua - 1999
This paper examines how increased uncertainty about an emerging market's international reserves affects the willingness of foreign investors to supply international credits. We illustrate the relevance of this concern for South Korea during the recent financial crisis. Using available...
Persistent link: https://www.econbiz.de/10012471586
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Common Fundamentals in the Tequila and Asian Crises
Tornell, Aaron - 1999
The cross-country variation in the severity of the crisis was largely determined by three fundamentals: the strength of the banking system, the real appreciation, and the international liquidity of the country. We also find that the rule that links fundamentals to the crisis severity has been...
Persistent link: https://www.econbiz.de/10012471655
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Reserve Requirements on Sovereign Debt in the Presence of Moral Hazard -- on Debtors or Creditors?
Aizenman, Joshua - 1999
This paper characterizes the effects of reserve requirements on financial loans in the presence of moral hazard on the lender side (i.e., the anticipation that the taxpayer will bailout lending banks if large default will occur) and sovereign risk on the borrower side. The impacts of such...
Persistent link: https://www.econbiz.de/10012471796
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Does It Matter How Central Banks Accumulate Reserves? Evidence from Sovereign Spreads
Sosa Padilla, César; Sturzenegger, Federico - National Bureau of Economic Research - 2021
There has been substantial research on the benefits of accumulating foreign reserves, but less on the relative merits of how these reserves are accumulated. In this paper we explore whether the form of accumulation affects country risk. We first present a model of endogenous sovereign debt...
Persistent link: https://www.econbiz.de/10012585457
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US Sanctions Reinforce the Dollar's Dominance
Dooley, Michael P.; Folkerts-Landau, David F. I.; … - National Bureau of Economic Research - 2022
Recent sanctions on the use of Russia's international reserve assets seem likely to reduce the appeal of US dollar reserves as a "shock absorber" for international payments. But international reserves are also a means to reassure foreign investors that problematic countries will not confiscate...
Persistent link: https://www.econbiz.de/10013191038