ECU-denominated international bonds owed much of their limited success in the 1980s and 1990s to restrictions on the internationalisation of the Deutsche mark and to speculative investment, rather than simply to the benefits of diversification. Basket bond issuance may come at the cost of a less...

Banks in the Asian economies most affected by the Asian financial crisis generally continue to enjoy comfortable liquidity in the international interbank market. The apparent international illiquidity of banks in Korea is concentrated in foreign banks. Foreign banks’ offshore funding of local...

The Lehman Brothers failure stressed global interbank and foreign exchange markets because it led to a run on money market funds, the largest suppliers of dollar funding to non-US banks. Policy stopped the run and replaced private with public funding.

The Asian crisis of 1997 taught policymakers in the region two main lessons. First, to build up foreign reserves. Second, to develop local bond markets. When central banks in the region accumulate foreign exchange reserves from capital inflows, they also sterilise the inflows. Those with large...

Trading in non-deliverable forwards on Asian currencies has grown in recent years. The offshore interest rates implied by these contracts differ significantly from onshore interest rates and suggest upward pressure on most Asian currencies.

This overview paper examines two main issues. The first is why the exchange rate matters, especially for emerging market economies. The second is under what circumstances and how countries have dealt with the challenges posed by the exchange rate in recent years in the context of inflation...

Non-US banks' affiliates in the United States took on about half of the claims on the Federal Reserve that it created to pay for its large-scale bond purchases. They did so largely through uninsured branches unaffected by a new Federal Deposit Insurance Corporation charge on wholesale funding...

A long-standing puzzle in international finance is the durability of the dollar's share of foreign exchange reserves - which remains above 60%, while the weight of the US economy in global output has fallen to less than a quarter. We argue that the dollar's role may reflect instead the share of...