Victoria Galsband, Thomas Nitschka, 10 March 2013

Violations of the uncovered interest-rate parity – a zero-profit equilibrium condition in foreign-exchange markets – seems to consistently give rise to profitable currency trading. This column highlights the risky nature of this phenomenon, arguing that it is the exposure to stock-market cash flows that is the key secret to making money from global currency portfolio investments. High returns from currency trading compensate investors for taking on severe stock-market risks.

Loriano Mancini, Angelo Ranaldo, Jan Wrampelmeyer, 03 September 2012

The foreign exchange market facilitates international trade and investment and is central to the global financial system. Market participants, both public and private, commonly think of the foreign exchange market as highly liquid at all times. This column challenges this view by documenting significant declines in liquidity during the recent financial crisis.

Events

  • 17 - 18 August 2019 / Peking University, Beijing / Chinese University of Hong Kong – Tsinghua University Joint Research Center for Chinese Economy, the Institute for Emerging Market Studies at Hong Kong University of Science and Technology, the Guanghua School of Management at Peking University, the Stanford Center on Global Poverty and Development at Stanford University, the School of Economics and Management at Tsinghua University, BREAD, NBER and CEPR
  • 19 - 20 August 2019 / Vienna, Palais Coburg / WU Research Institute for Capital Markets (ISK)
  • 29 - 30 August 2019 / Galatina, Italy /
  • 4 - 5 September 2019 / Roma Eventi, Congress Center, Pontificia Università Gregoriana Piazza della Pilotta, 4, Rome, Italy / European Center of Sustainable Development , CIT University
  • 9 - 14 September 2019 / Guildford, Surrey, UK / The University of Surrey

CEPR Policy Research