News and Insights

Why Many Firms Get a Bad Deal when Hedging Currency Risk - new publication by Harald Hau

Corporate foreign exchange risk hedging mostly occurs through forward rate contracts with a dealer bank in over-the-counter markets. Unlike in a centralised market, prices are negotiated bilaterally, which gives rise to a large dispersion of transaction prices. It is often difficult for less sophisticated market participants to gauge the quote and execution quality due to the absence of relevant benchmarks, especially in real-time.

This new paper by GFRI's Prof. Harald Hau and his co-authors Peter Hoffmann, Sam Langfield, and Yannick Timmer, uses new regulatory data to reveal how often firms get a bad deal and what they can do to avoid it.

It was published by, and can be found here >

 To learn more about Prof. Hau and his work >

March 21, 2022
  News and Insights