They use similar measures to those we employ in Chapters 2 & 3 to estimate long-term demands for FX hedging, which they consider to be the primary driver of structural CIP deviations. Further additional cyclical deviations can also be caused by global or country-specific liquidity crises.
Borio, C. and McCauley R. and McGuire P. and Sushko V. (October 2016). BIS Working Papers, NO. 590.
Read Now: https://www.bis.org/publ/work590.pdf
