Pension Fund Managers and the Structure of the Foreign Exchange Market

Hernando Vargas-Herrera and Yanneth Betancourt-Garcia

Revista ESPE - Ensayos Sobre Política Económica, 2007, vol. 25, issue 54, No 4642, 122-155

Abstract: The effects of the Pension Fund Managers (PFM) behavior on the Foreign Exchange (FX) market may be important, given the size of their portfolio and their possible market power. Some authors argue that when big investors like PFM trade large vol-umes in the FX market, they may infl uence other agents´ decisions, increasing the impact on the exchange rate. However, when PFM have market power, they will take into account their infl uence on the exchange rate and will moderate their trad-ing volume. This paper seeks to demonstrate the existence of this mitigating effect" under different theoretical FX market structures."

Keywords: pension funds; foreign exchange mar-ket; market power. (search for similar items in EconPapers)
JEL-codes: D43 F31 G23 (search for similar items in EconPapers)
Date: 2007
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https://doi.org/10.32468/Espe.5404

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Journal Article: Pension Fund Managers and the Structure of the Foreign Exchange Market (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000107:004642

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