The foreign exchange market seeks to use a market-based mechanism to discover a price for a currency. But, this price discovery mechanism is hampered by a variety of externalities, chief of which is the different intermediaries involved in the trading and clearing of a currency. Such...

Recent financial crisis shows a similar trend where the financial crisis follows an asset bubble. Such an asset bubble could be in stocks or the housing market. What is common is that the assets are not easily unwound given their size of investment (stocks) or long-term nature of the investment...