We show that the role of unsecured, short-term wholesale funding for global banks has changed significantly in the post-financial-crisis regulatory environment. Global banks mainly use such funding to finance liquid, near risk-free arbitrage positions--in particular, the interest on excess...

This study explores the impact of the COVID-19 pandemic on the deviations from the covered interest rate parity (CIP) for G10 currencies. We find that more COVID-19 infection cases or higher stringency index are associated with larger CIP deviations. However, this relation disappears after the...