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FX Funding Risks and Exchange Rate Volatility–Korea’s Case

This paper examines how exchange rate volatility and Korean banks’ foreign exchange liquidity mismatches interacted with each other during the Global Financial Crisis, and whether the vulnerability stemming from this interaction has been reduced since then. Structural and cyclical changes after the...

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Bibliographic Details
Main Author: Ree, Jack
Other Authors: Park, Hail, Yoon, Kyoungsoo
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2012
Series:IMF Working Papers
Subjects:
Depository Institutions
Banks And Banking, Foreign
Banks
Finance
Banks And Banking
Financial Institutions
Micro Finance Institutions
Currency
Exports And Imports
Mortgages
International Lending And Debt Problems
International Economics
External Debt
Debts, External
International Financial Markets
Currency Markets
Foreign Exchange
Financial Markets
Banking
Foreign Exchange Market
Exchange Rates
Foreign Banks
Finance: General
Financial Crises
Korea, Republic Of
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper examines how exchange rate volatility and Korean banks’ foreign exchange liquidity mismatches interacted with each other during the Global Financial Crisis, and whether the vulnerability stemming from this interaction has been reduced since then. Structural and cyclical changes after the crisis, including decreasing demand for currency hedges and the diversifying investor base for bonds, point to a possible weakening of the interaction mechanism; and we find evidences are strongly supportive of this. 
Physical Description:29 pages
ISBN:9781475565171

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