金融与财务学系系列讲座之323期

Time：14:00-15:30, Tuesday, May 13, 2025

Location: Room 603, Starr Building（史带楼603室）

Topic: Beyond Bilateral Flows: Indirect Connections And Exchange Rates

Speaker: Pasquale Della Corte

Imperial College London

Abstract: This paper studies how cross-border financial connections affect the response of exchange rates to trade shocks. Theoretically, we develop a multi-country model whereby a country’s exchange rate depends on the financiers’ ability to manage capital flows between a country and its counterparties (direct connection) and between its counterparties and their trading partners (indirect connection). Empirically, we quantify the network of financial connections using granular data on cross-border claims and liabilities of globally active banks. Consistent with our theoretical predictions, we find that indirect connection can either amplify or mitigate the impact of trade shocks on future exchange rate returns, depending on the shock’s origin and size, while direct connection always dampens these effects.

Bio: Pasquale DELLA CORTE is a Professor of Finance at Imperial College Business School, Imperial College London, and serves as an Associate Editor of the Journal of Financial Markets (JFM). Prior to joining Imperial College, Pasquale was an Assistant Professor of Finance at Warwick Business School. Pasquale’s research focuses on international finance, global asset allocation, empirical asset pricing, portfolio choice, market microstructure, and Bayesian econometrics, and has been published in the Journal of Finance, Journal of Financial Economics, the Review of Economics and Statistics, the Review of Financial Studies, Management Science, and the Journal of Empirical Finance. His research has also received the INQUIRE UK 2010 and INQUIRE UK 2011 Best Paper Awards, and KEPOS CAPITAL Award for the Best Paper on Investments at the 2013 WFA meetings.