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No. And some currency are particularly weak right now to this kind of attacks[0], like the CHF, as well as the colonial CFA. The theoric ideas to resist this f
by orwin 5y ago
No. And some currency are particularly weak right now to this kind of attacks[0], like the CHF, as well as the colonial CFA.
The theoric ideas to resist this for a country is either:
to let your currency fluctuate freely, as the free market theory wants. But this is basically selling your small and medium business production to companies that can do faster arbitrage than them. I know this is the liberal way, but when you think about it, this is not viable if you have any industry and free trade agreements with a countries with richer banks/companies. This would be economic suicide for Mexico if you want an example.
Other way to resist this is to have a lot of dollar/eu bonds and sell them. If you have more bonds than the attacker money, you "win" (the attacker doesn't loose much either). I'm pretty sure some money can be capted during an attack for HFT firms, but don't quote me on that, and i'd like confirmation from someone actually working with HFT systems here
And the last way is having one of the strongest currency in the world. Dollar, Euro, Yuan basically. Pound and Yen "waste" their respective central bank millions each year
[0]: https://ideas.repec.org/p/nbr/nberwo/5285.html https://ideas.repec.org/p/nbr/nberwo/5285.html