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Foreign currency corporate borrowing: Risks and policy responses


Atish R. Ghosh, Jonathan D. Ostry, Mahvash S. Qureshi
Non-financial corporations in emerging market economies (EMEs) increasingly rely on foreign currency debt for financing. Since the global crisis of 2008, the amount of dollar-denominated debt of EME corporations has quadrupled.
1 Research has shown that interest rate differentials between EMEs and the US have contributed significantly to this phenomenon (Bruno and Shin 2017). In essence, EME corporations prefer to borrow in foreign currency when there is a ‘carry’, meaning foreign interest rates are low relative to domestic interest rates. This carry trade borrowing leaves the firms exposed to sudden stops in capital flows and associated currency depreciations (Bruno and Shin 2020). More broadly, the accumulation of external debt on private balance sheets can lead or contribute to currency depreciation spirals and thereby poses risks for EME growth and financial stability (Acharya et al. 2015, Du and Schreger 2017) ....

Emes Sahay , Ben Bernanke , International Monetary Fund , London School Of Economics , Central Bank , Princeton University , International Settlements , See Bank , Committee On International Economics , Monetary Policy , Centre For International Governance Innovation , A Firm , Brookings Institute , Reserve Bank , Sharpe Ratio Like , Chairman Ben Bernanke , Flow Management , Financial Stability , Transmission Mechanisms , Policy Implications , Central Banking , Economic Policies Book Series , Corporate Debt , Emerging Economies , International Economics Policy , International Governance ,

Latsos, S. (2019). The Low Interest Policy and the Household Saving Behavior in Japan. Working Paper No. 159, Leipzig University of Leipzig. - References


ABSTRACT: In the aftermath of the Global Financial Crisis
(GFC) 2007/2008 the sales of Hayek’s (1944) Road to Serfdom quadrupled, a clear indication of renewed public
interest in the views of (neo-) Austrian economists on macro-economic crises,
especially financial crises. It is also true that several economists associated
with the Austrian school, or those using neo-Austrian insights, correctly
predicted the U.S. housing bubble and the subsequent GFC, apparently, a clear
vindication of (neo-) Austrian cycle theory (Hunter,
2018). More surprising is that even relatively fierce
opponents of neo-Austrian macro-theory have meanwhile begun to accept some
Austrian insights. We thus ought to ask, what are the basic tenets of the ....

Laurie Conway , Karl Farmer , Financial Crisis , Neo Austrian Economics , Austrian Business Cycle Theory , Unconventional Monetary Policy , Modern Economy , Global Financial Crisis , Great Recession , S 2019 The Low Interest Policy And Household Saving Behavior In Japan Working Paper No 159 , Eipzig University Of Leipzig , லாரி கான்வே , நிதி நெருக்கடி , ஆஸ்திரேலிய வணிக மிதிவண்டி கோட்பாடு , வழக்கத்திற்கு மாறானது பண பாலிஸீ , நவீன பொருளாதாரம் , உலகளாவிய நிதி நெருக்கடி , நன்று மந்தநிலை ,