The main functions of foreign exchange markets marked the beginning of Carmen Carrillo's presentation, in which she highlighted their transparency and high degree of efficiency. She also pointed out other characteristics such as their 24-hour operation and the absence of a traditional regulatory body, a responsibility that falls directly to central banks. Carrillo then went on to list some of the main functions of the foreign exchange market, such as facilitating the transfer of trade flows between countries and providing hedging against exchange rate risk, among others.
Other aspects addressed in this presentation revolved around the storage cost model and the differentiation between "Cash" and "Term," and alternatives to standard exchange insurance.
Derivatives were another topic addressed by Carmen Carrillo, who highlighted the spectacular growth in trading volumes for these products in recent years. Carrillo also discussed volatility, currency options, barrier options, structured liabilities, and import/export hedging products.
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