International Currency Exposures and the Global Financial Crisis
We examine the evolution of international currency exposures, with a particu-
lar focus on the 2002-12 period. During the run up to the global nancial crisis,
there was a widespread shift towards positive net foreign currency positions, such
that relatively few countries exhibited the archetypal emerging-market short for-
eign currency" position on the eve of the global nancial crisis. During the crisis,
the upheaval in currency markets generated substantial currency-generated valua-
tion eects - much of which were not reversed. There is some evidence that the
distribution of valuation eects was stabilizing in the sense of showing a negative
covariation pattern with pre-crisis net foreign asset positions.