TY - JOUR AU - Corsetti,Giancarlo AU - Pesenti,Paolo AU - Roubini,Nouriel TI - The Role of Large Players in Currency Crises JF - National Bureau of Economic Research Working Paper Series VL - No. 8303 PY - 2001 Y2 - May 2001 UR - http://www.nber.org/papers/w8303 L1 - http://www.nber.org/papers/w8303.pdf N1 - Author contact info: Giancarlo Corsetti Faculty of Economics Cambridge University Sidgwick Avenue CB3 9DD Cambridge, Cambs United Kingdom Tel: +44(0)1223335235 E-Mail: giancarlo.corsetti@gmail.com Paolo A. Pesenti Federal Reserve Bank of New York 33 Liberty Street New York, NY 10045 Tel: 212/720-5493 Fax: 212/720-6831 E-Mail: paolo.pesenti@ny.frb.org Nouriel Roubini Department of Economics, KMC 7-83 Stern School of Business, New York University 44 West 4th Street New York, NY 10012 Tel: 212/998-0886 Fax: 212/995-4218 E-Mail: nroubini@stern.nyu.edu M1 - published as Giancarlo Corsetti, Paolo Pesenti, Nouriel Roubini. "The Role of Large Players in Currency Crises," in Sebastian Edwards and Jeffrey A. Frankel, editors, "Preventing Currency Crises in Emerging Markets" University of Chicago Press (2002) AB - During recent episodes of financial turmoil some policy makers voiced concerns about aggressive, and possibly manipulative, practices by highly leveraged institutions in emerging markets. This paper addresses these concerns by reconsidering in detail, at both theoretical and empirical levels, the role of large players in currency crises. The first part of the study discusses analytical results from different models of speculative attack, suggesting that the presence of agents with market power can increase a country's vulnerability to a crisis and make other investors more aggressive in their position-taking. Both size and reputation for quality of information matter in determining large players' impact on the market. The second part of the study presents evidence on the correlation between exchange rate movements and major market participants' net currency positions, and delves into a comparative analysis of several recent crisis episodes in Thailand, Hong Kong, Malaysia, Australia, and South Africa in light of the previous theoretical results. ER -