The Prudential Regulation and Management of Foreign Exchange Risk

33 Pages Posted: 15 Feb 2006

See all articles by Richard Abrams

Richard Abrams

International Monetary Fund (IMF)

Paulina Beato

affiliation not provided to SSRN

Date Written: March 1998

Abstract

This paper examines issues in the prudential management and regulation of foreign exchange risk. It begins with measurement issues, notably converting foreign currency items into domestic currency terms, and calculating foreign exchange positions. The focus then shifts to managing foreign exchange risks. Although the key to effective management lies in the bank`s reporting and internal control systems, regulators frequently seek to limit such risks directly. This usually involves limiting the overall open position in terms of bank capital or requiring that capital be set aside against such risks.

Keywords: prudential regulation, foreign exchange, risk, foreign currency, banking supervision

JEL Classification: F31, G28

Suggested Citation

Abrams, Richard and Beato, Paulina, The Prudential Regulation and Management of Foreign Exchange Risk (March 1998). IMF Working Paper No. 98/37, Available at SSRN: https://ssrn.com/abstract=882281

Richard Abrams (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Paulina Beato

affiliation not provided to SSRN

No Address Available

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
555
Abstract Views
2,073
Rank
91,383
PlumX Metrics