Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/174458 
Authors: 
Year of Publication: 
2017
Series/Report no.: 
Working Papers No. 2017-05
Publisher: 
Banco de México, Ciudad de México
Abstract: 
Existing literature uses data based on the residence principle to proxy for currency mismatch. This paper collects data on assets and liabilities broken by currency of denomination in the banking sector in Latin America and the Caribbean. I show that the information used in the literature cannot substitute for data broken down by currency and present new facts. I observe a reduction in long foreign currency positions, with several banking sectors taking short positions after 2006. Employing a methodology that accounts for time-varying unobservable characteristics, this reduction is shown to be partially explained by the implementation of prudential policies.
Subjects: 
currency mismatch
prudential regulation
foreign currency risk
dollarization
synthetic control method
JEL: 
G18
G21
F30
Document Type: 
Working Paper
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