The fragility of two monetary regimes: the European monetary system and the Eurozone

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Bibliographic Details
Other Authors:	De Grauwe, Paul 1946- [Author]
Type of Resource:	E-Book
Language:	English
published:	München CESifo 2013
Series:	CESifo GmbH: CESifo working papers ; 4471 : Category 7, Monetary Policy and International Finance
Subjects:	Arbeitspapier Online-Publikation Europäische Union > Währungsunion > Fiskalpolitik > Europäische Zentralbank Europäische Union > Mitgliedsstaaten > Notenbank > Stabilität
Source:	Verbunddaten SWB Lizenzfreie Online-Ressourcen

Description
Summary:	We analyze the similarities and the differences in the fragility of the European Monetary system (EMS) and the Eurozone. We test the hypothesis that in the EMS the fragility arose from the absence of a credible lender of last resort in the foreign exchange markets while in the Eurozone it was the absence of a lender of last resort in the long-term government bond markets that caused the fragility. We conclude that in the EMS the national central banks were weak and fragile, and the national governments were insulated from this weakness by the fact that they kept their own national currencies. In the Eurozone the roles were reversed. The national central banks that became part of the Eurosystem were strengthened. This came at a huge price, i.e. the fragilization of the national governments that could be brought down by the whims of fear and frenzy in financial markets.
Physical Description:	Online-Ressource (37 S.); graph. Darst
Type of Resource:	Acrobat Reader. Systemvoraussetzungen: Acrobat Reader.