The returns to carry trades are controversially discussed as there seems to be no unifying risk-based explanation of … currency returns and stock returns. This paper addresses carry trade returns from a risk pricing perspective and examines if … these returns can be connected to persistent cross-country differences of risk aversion. Therefore, I analyze a data set of …

measure of funding risk is the standard deviation of the magnitude of the funding constraints. This funding risk measure …, oil price volatility, as well as by the actions of the main central banks. Although funding risk has been present … constraints start binding at that time. We document evidence that since 2008 funding risk has affected the magnitude of currency …