This year’s Symposium, organised by the Centre for Endowment Asset Management, brought together leading academics, policymakers and market practitioners to examine how funding markets, derivatives and bond markets jointly shape currency behaviour. Across sessions on dollar funding and markups, FX derivatives, bond-FX interactions, expectations formation and emerging markets, speakers highlighted new evidence on pricing, liquidity, volatility and risk premia, as well as the growing importance of global investors, intervention strategies and hedging beyond dominant currencies in driving the future dynamics of FX markets.
What makes this conference distinctive is the way it connects rigorous academic research with the realities of modern FX markets. By bringing together scholars, central banks and industry practitioners, we are not only documenting how currency markets are changing, but we are also helping to shape the agenda for how they will evolve in the years ahead.
Joint winners due to exceptional paper quality
Owing to the exceptional quality of the papers, this year’s Symposium held 17-18 August decided to share the award among the 2 papers. The winning papers are:
Financial Hedging Beyond Dominant Currency
Co-authored by Laura Alfaro of Harvard Business School, Mauricio Calani of the Central Bank of Chile and Liliana Varela of the London School of Economics
This paper challenges the view the firms are shielded from exchange-rate risk through dominant-currency invoicing, and shows that natural hedging offers limited risk protection. The paper used a unique firm-level dataset linking Chilean companies to international trade transactions, foreign-exchange derivatives and foreign debt over a 20-year period.
When Funding Markets Move Credit Markets: Foreign Investors and Their U.S. CLOs
Co-authored by Amy W Huber of the Wharton School and Shohini Kundu of UCLA Anderson
This paper shows that US leveraged credit and global dollar funding markets are linked through Japanese banks. The paper develops a model that examines the aggregate demand elasticity of Japanese banks, and the results show that exposure of domestic credit markets to external funding shocks depends on the elasticity of foreign demand and not only on foreign participation.
This year’s Symposium also introduced a new Best Discussant Prize, which was awarded to Riccardo Colacito, Professor of Finance at Kenan-Flagler Business School at the University of North Carolina. The award recognises the important role discussants play in facilitating academic discussion and providing constructive feedback on research.
With the support CME Group and Pembroke College, Cambridge and the Cambridge Endowment for Research in Finance (CERF) and the Centre for Endowment Asset Management (CEAM) it has been possible to continue this symposium – recognised globally as one of the leading academic conferences in international finance – as an annual event at the University of Cambridge from 2025.
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