Real Consequences of Shocks to Intermediaries Supplying Corporate Hedging Instruments

• 成果类型: Article
• 署名作者: Jung, Hyeyoon
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhae066
• 发表日期: 2024
• 页码: 39
• 关键词: CAPITAL REQUIREMENTS EVIDENCE; FOREIGN-CURRENCY DERIVATIVES; AFFECT FIRM VALUE; RISK-MANAGEMENT; international transmission; TRADE; liquidity; banks; deviations; finance

摘要

I show that shocks to financial intermediaries supplying hedging instruments to corporations have real effects. I exploit a quasi-natural experiment in South Korea in 2010, where regulations required banks to hold enough capital for taking foreign exchange derivatives (FXD) positions. Using variation in exposure to this regulation across banks, I find that the regulation caused a reduction in FXD supply, leading to a significant decline in exports for firms contracting derivatives with more exposed banks. Results indicate the crucial role of intermediaries in allocating risks through derivatives provision and establish a causal relationship between financial hedging and real economic outcomes.