Federal Reserve Bank of San Francisco: Domestic Risk-Sharing Shortfalls Help Explain Exchange Rate Patterns
July 23, 2025
July 23, 2025
SAN FRANCISCO, California, July 23 (TNSLrpt) -- The Federal Reserve Bank of San Francisco has released a report titled 'Incomplete Markets and Exchange Rates,' offering new insights into why exchange rates behave unpredictably in international markets. Issued on July 8, 2025, the study addresses anomalies in currency movements--such as the longstanding Backus-Smith puzzle--by analyzing the effects of imperfect risk-sharing within and across countries. The report was authored by Emile A . . .