Monetary Implications of Cross-Border Derivatives for Emerging Economies /

This paper surveys concepts, practices and analytical literature to assess benefits and risks for monetary stability of cross-border currency and interest rate derivative operations in calm and turbulent periods, with a view of extracting implications for emerging economies. Monetary authorities mus...

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Detalles Bibliográficos
Autor Principal: Mendez Morales, Armando
Formato: Revista
Idioma:English
Publicado: Washington, D.C. : International Monetary Fund, 2001.
Series:IMF Working Papers; Working Paper ; No. 2001/058
Acceso en liña:Full text available on IMF
Descripción
Summary:This paper surveys concepts, practices and analytical literature to assess benefits and risks for monetary stability of cross-border currency and interest rate derivative operations in calm and turbulent periods, with a view of extracting implications for emerging economies. Monetary authorities must prevent one-sided positions in the currency, favor asset substitutability, and incorporate the enriched information set provided by derivative-based transactions into monetary policy design. In some circumstances, the use of derivatives by monetary authorities may help fulfill this role. By contrast, surcharges to compensate for a downward impact of derivatives on the cost of capital appear neither advisable nor necessary.
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Descrición Física:1 online resource (40 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
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