Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/32146
Authors: 
Bannier, Christina E.
Year of Publication: 
2004
Series/Report no.: 
Volkswirtschaftliche Diskussionsbeiträge 77
Abstract: 
Market participants often suspect that large traders have a disproportionate effect on financial markets, increasing the aggressiveness of market responses. Prior studies have shown that the impact of a large trader on a currency crisis depends positively on his size and informational position. By contrast, this article highlights the role that market sentiment has on the impact of a large trader. If the market believes that fundamentals are weak, then the probability of a crisis depends positively on the trader's size but negatively on the precision of his information, with these effects reversed in a generally optimistic market. A large player, therefore, need not make market responses more aggressive.
Subjects: 
currency crises
large traders
market sentiment
coordination
private and public information
JEL: 
F31
D82
Document Type: 
Working Paper

Files in This Item:
File
Size
590.38 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.