Hedging in Derivatives Markets: The Experience of Chile

Avalos, Fernando H.; Moreno, Ramon

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Hedging in Derivatives Markets: The Experience of Chile

BIS Quarterly Review March 2013

11 Pages Posted: 12 Apr 2013

See all articles by Fernando H. Avalos

Fernando H. Avalos

Bank for International Settlements (BIS)

Prior to the onset of the 2008 financial crisis, domestic FX derivatives markets in Chile had gained depth and liquidity, boosted by the growing hedging needs of private pension funds. During the crisis, Chile suffered significantly less stress than other EMEs, within Latin America and outside. We present evidence suggesting that this was related to the liquidity and resilience of its FX derivatives markets.

JEL Classification: E44, F31, G23

Suggested Citation: Suggested Citation

Avalos, Fernando Hugo and Moreno, Ramon, Hedging in Derivatives Markets: The Experience of Chile (March 2013). BIS Quarterly Review March 2013, Available at SSRN: https://ssrn.com/abstract=2248497