Large FX dealers key to asset pricing – Bundesbank paper
Capital ratios of large forex dealers are important in explaining asset price movements, paper says
Large foreign exchange dealers’ portfolios may “reveal potential repercussions of banking regulation on financial market prices”, a working paper published by the Deutsche Bundesbank finds.
In Foreign exchange dealer asset pricing, Stefan Reitz and Dennis Umlandt note that the standard asset market approach assumes the typical household is capable of “efficiently processing all relevant information”. This household “enjoys access to all financial markets, and is able to perform complex trading
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