TY - JOUR
T1 - Why do central banks intervene secretly?. Preliminary evidence from the BoJ
AU - Beine, Michel
AU - Bernal, Oscar
PY - 2007/7
Y1 - 2007/7
N2 - This paper empirically investigates the main determinants of secret interventions in the foreign exchange (FX) market. Using the recent experience of the Bank of Japan, we estimate a model that explains the share of secret to reported interventions in the FX market. Two sets of determinants are clearly identified: the first is related to the probability of detection of the central bank orders by market participants; the second to the central bank's internal decision to opt for secrecy. Our estimations support the arguments of current microstructure theories that rationalize the use of secret interventions.
AB - This paper empirically investigates the main determinants of secret interventions in the foreign exchange (FX) market. Using the recent experience of the Bank of Japan, we estimate a model that explains the share of secret to reported interventions in the FX market. Two sets of determinants are clearly identified: the first is related to the probability of detection of the central bank orders by market participants; the second to the central bank's internal decision to opt for secrecy. Our estimations support the arguments of current microstructure theories that rationalize the use of secret interventions.
KW - Central bank interventions
KW - Exchange rates market
KW - Secrecy puzzle
UR - http://www.scopus.com/inward/record.url?scp=34249036104&partnerID=8YFLogxK
U2 - 10.1016/j.intfin.2005.12.003
DO - 10.1016/j.intfin.2005.12.003
M3 - Article
AN - SCOPUS:34249036104
VL - 17
SP - 291
EP - 306
JO - Journal of International Financial Markets, Institutions and Money
JF - Journal of International Financial Markets, Institutions and Money
SN - 1042-4431
IS - 3
ER -