Limits to Foreign Exchange Net Open Positions and Capital Requirements in Emerging Economies

Marc Hofstetter, Jose Lopez and Miguel Urrutia ()

No 15995, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: Many emerging economies have regulatory limits on foreign exchange rates net open positions of banks. We show that such limits leave the capital adequacy ratios of banks with investments in foreign subsidiaries more exposed to exchange rate fluctuations. We discuss alternative policies for overcoming this trade-off.

Keywords: Foreign Exchange Open Positions; Capital Requirements (search for similar items in EconPapers)
JEL-codes: F23 F42 G21 (search for similar items in EconPapers)
Pages: 33
Date: 2018-01-29
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:015995

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