Lessons for the foreign exchange market from the global financial crisis

Michael Melvin, Mark P. Taylor, 6 November 2009

The timing of the subprime crisis that became the global crisis is well known. Its impact on the foreign exchange markets has been much less discussed. This column fills that void. Its findings suggest that foreign exchange portfolio managers could have protected their portfolio by an appropriate risk control strategy using market stress indicators.

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The timing of the subprime crisis, which became the global crisis, is well known; see, for example, New York Fed (2009). The impact on the foreign exchange markets has been much less discussed.

Topics: Exchange rates, International finance
Tags: foreign exchange, FX markets, global crisis

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