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The shadow banking or financial institutions specializing in lending who take an increasingly larger share of today's markets and channels for the movement of financial resources in the markets of resources between economic agents or households.The main scientific question of this paper is to analyze the reasons of dynamic trends of development of the shadow financial system, and how that contrasts with the conventional model of financial intermediation of commercial banking: “The chains for value creation through credit intermediation that move free financial resources in economic systems for realizing more efficient operations with fewer risks; In non-banking credit intermediation chain trades that take place on weighted average price - and exchange rates in the markets for short-term securities; yield creation in the shadow banking industry are intensively secured strongly which personally are guaranteed both, from individuals and the firms; value chains in the alternative banking system have carried out extensive conventional financial transformation outside the banking system. This means that this type of intermediation converts illiquid, risky fixed assets in "safe" and liquid short-term liabilities.”The used methods are: content analysis, and econometrics analysis of empirical databases of the years 2012 – 2016 by two financial sectors from BNB.The finding based on the econometrics analyses supports the scientific hypothesis about relations between the process of the increasing role of the informal banking sector, which pushes conventional bank financing due to high credit standards of banking institutions and limited access to finance for individuals who receive their income in the area of the gray economy.

This article analyzes the potential for institutional design to depoliticize macroeconomic policy-making by examining currency board arrangements. It develops a novel argument to understand the effects of institutional design based on institutional complementarities. This argument highlights that the functioning of a given institution is conditioned by the broader institutional context. The article contrasts this framework with two common approaches – here termed the institutional design and the epiphenomenalism views – and argues that the centrality of institutional complementarities can account for the mixed record of currency boards. The most important complementarities of a currency board are with fiscal, labor market and informal institutions, which are important prerequisites for successful currency boards. By drawing on recent advances in the study of depoliticization, we show how these institutions contribute to governmental, societal and discursive depoliticization. This argument is evaluated by examining three case studies of currency boards – Argentina, Estonia and Lithuania. The article also explores some broader implications of this analysis for understanding the depoliticization of economic policy.

The Currency Board arrangement (CBA) is a specific form of monetary authorities with limited functions. Central Bank of Bosnia and Herzegovina operates under the CBA with the following characteristics: complete coverage of the monetary liabilities with the foreign exchange reserves, there are only required reserves as the instrument of monetary policy, there are the prohibition on granting loans and prohibition of open market operations, and the exchange rate of the local currency is pegged to the euro as “anchor” currency. The top economic experts have completely different views about the efficiency and purpose of the CBA, under which the central banks of some countries in the East Europe (eg. Bulgaria, Lithuania, and Estonia until recently) also operate. This paper explains the basic elements of the central bank operations under the CBA, highlights the basic implications of such an arrangement on economic situation in the country, and considers possible scenarios for exiting this arrangement in perspective, in fact, it indicates the potential exit strategy in the course of leaving the CBA.

The content of the Gold and Foreign Exchange Reserves of the country is highlighted in this research work. Their dynamics and structure is analyzed for the period from 2007 to 2018. It is arrived at a conclusion that the Board’s liquidity is increased. For the considered period the Monetary Base and Fiscal Reserve backed by the gold and foreign exchange reserves is examined as well. There is an over-coverage of the Monetary Base and Fiscal Reserve, which is a guarantee for covering the internal and foreign liabilities of the country. The Currency Board as a specific monetary system successfully fulfills its role in the conditions of global economic and political insecurity.

The National Bank of Egypt (NBE) was introduced in 1898. It acted as both a central and commercial bank for Egypt, and for Sudan for some time. The burgeoning Egyptian economy was thought to eventually necessitate a central bank, so in 1961, some of the assets of the NBE were taken to form the Central Bank of Egypt (CBE). Ever since, the CBE has been Egypt’s monetary authority. Its activity has come under scrutiny over the years due to its inability to cope with economic challenges, most notably inflation. This paper examines the prospects for introducing a currency board in Egypt. It compares this possibility to the existing monetary infrastructure in place and determines whether a currency board is a suitable path to take.Keywords. National Bank of Egypt (NBE), Central Bank of Egypt (CBE), Inflation, Currency board.JEL. E58, N15, O23.

We describe the history of Jamaica’s currency board system, which existed from 1920 to 1961; test how orthodox the currency board was; and compare some features of the currency board and the Jamaican economy during the currency board period to the Bank of Jamaica and to the Jamaican economy under central banking.Keywords. Jamaica, Currency board, Central bank.JEL. E52, N16.

When Ireland gained its independence from the United Kingdom in 1922, contrary to the recommendations offered by the League of Nations, the new country established a Currency Commission that operated similarly to a currency board rather than a central bank. I analyze the structure of the Currency Commission and describe the establishment of a central bank in the 1940s with limited monetary powers, then later a central bank with broader powers. I compare the legal structures and operations of the early Central Bank of Ireland and the Currency Commission balance sheet analysis and other approaches to conclude that there are distinct differences between a currency board and a central bank that operates like one.Keywords. Ireland, Central bank, Currency board, Balance sheet.JEL. E58, N24.

The monetary policy of Bosnia and Herzegovina is rather limited because it is based on the principles of a currency board characterized by the impossibility of implementing the basic monetary policy instruments in comparison with the monetary policy of the European Union. However, the constant presence of European integrations should point the need for a more drastic change in the monetary policy of Bosnia and Herzegovina. By entering the European Monetary Union (EMU), the monetary territory of Bosnia and Herzegovina will become one of the branches of the European Central Bank (ECB). In addition, it is not difficult to conclude why the Law about the Central Bank of Bosnia and Herzegovina has been adopted with the first laws of the Dayton Agreement, if it is known that the largest part of the banking system, and therefore the financial market, is owned by foreign banks. This work will point out the significance of the Central Bank of Bosnia and Herzegovina, as one of the most important factors for maintaining the permanent liquidity of the banking sector in Bosnia and Herzegovina. The possibilities and limitations of the Central Bank of Bosnia and Herzegovina will be determined, with the assumption of macroeconomic sustainability over a longer period of time. The need of reforming the banking system in Bosnia and Herzegovina will be analyzed through the constant implementation of the Basel standards with the increasing participation of foreign banks in the Bosnia and Herzegovina. It will be determined the impact of the implementation of the Basel III in the banking industry in Bosnia and Herzegovina and its consequences on the banking and economic system.models, on the ways of financing the elimination of adverse consequences of natural disasters.

2008 küresel finansal krizi Merkez bankaların para politikalarında değişikliğe sebep olmuştur. Bu çalışmada 2008 finansal krizi sonrasında Türkiye Cumhuriyet Merkez Bankasının(TCMB) para politikasında yaşanan değişiklikler ele alınmıştır. Kriz sonrasında TCMB para politikası amaç ve araçlarında değişiklikler yaşanmıştır. TCMB açısından 2001 krizi sonrasında ortaya atılan finansal istikrar kavramı söylemleri 2008 krizi sonrasında daha belirgin hale gelmiş ve TCMB para politikası amacı fiyat istikrarı ve finansal istikrar olmuştur. TCMB amaçları ile birlikte araçlarında da değişiklik yaparak kriz sonrasında yeni bir döneme başlamıştır. Merkez bankasında geleneksel para politikası araçlarının yanında geleneksel olmayan politikası aracı olarak Rezerv Opsiyon Mekanizması(ROM), faiz koridoru, zorunlu karşılık oranları kullanılmaya başlanmıştır. Bu çalışma üç bölümden oluşmaktadır, birinci bölümde kriz kavramı ele alınmış ve açıklanmaya çalışılmıştır. İkinci bölümde para, para politikası, politika araçları ve Merkez bankacılığı incelenmiştir, üçüncü bölümde kriz sonrasında TCMB'nin uygulamaları ele alınmıştır. Çalışmanın kapsamında 2008 kriz sonrasından başlayarak 2017 yılına kadar uygulanan para politikası ele alınmıştır. Tezimizin sonucunda Merkez bankasının geleneksel ve yeni para politikası araçlarının birbiriyle entegre hale getirerek başarılı bir şekilde kullandığı ve ekonomik gelişmelere hızlı aksiyonlar alarak müdahale edebildiği tespit edilmiştir. The 2008 global financial crisis has caused changes in central banks. In this study, the changes experienced in the CBRT were discussed after the 2008 financial crisis. In the aftermath of the crisis, the aims and instruments of the CBRT monetary policy changed. Discussions of the concept of financial stability emerged after the crisis of 2001 in terms of the CBRT became more evident after the 2008 crisis and the aim of the CBRT monetary policy was price stability and financial stability. It has begun a new era in the aftermath of the crisis by making changes in its instruments as well as its aims. In addition to traditional monetary policy tools, the central bank used non-traditional policy tools such as ROM, Interest Rate Corridor, and required reserve ratios. The aim of this study is to analyze within the monetary policy implemented by the CBRT after the crisis. The study is divided into three sections, the first chapter deals with the concept of crisis and attempts to explain it. In the second part, money, monetary policy, policy instruments and central banks were tried to be explained. In the third and last section, the applications of CBRT were taken after the crisis. Within the scope of the study, the monetary policy implemented from the beginning of the crisis until the year 2017 was discussed. In the last part of this study, it was seen that the Central Bank successfully intervened by integrating traditional and new monetary policy tools into one another and taking rapid action in economic development. 134

Fredrik Andersson and Lars Jonung describe Iceland’s economy and list the possible currency regimes. They ask which is the best monetary policy regime for Iceland and conclude that a flexible exchange rate with an inflation target can be ruled out because such a system has served as a shock amplifier. They find that Iceland can only maintain a domestic inflation target over the long run through capital controls. But the authors consider such controls to be very costly and likely to increase corruption. Instead of a floating regime, they find that a fixed exchange rate regime is the preferred choice. But as a microstate, Iceland is not able to create sufficient credibility for such a regime, which leaves a monetary union as a solution. But since full euroization is not an option for Iceland because it is not a full member of the European Union, nor will be a member in the foreseeable future, the preferred monetary union alternative is, in their view, a currency board, accompanied by a wide-ranging reform package to foster fiscal stability, wage and price flexibility, and financial stability.

This study aims to determine the extent to which the West African Monetary Zone (WAMZ) can fulfill the Expost conditions for achieving convergence. This study, therefore, evaluates the pattern of shock symmetry and convergence in connection to WAMZ’s Pillar III policy strategy. Time series data sourced from the World Bank for the period covering 1970 to 2017 were utilized for this study. Two basic econometric tools such as Impulse Response Function (IRF) and the ADF convergence test were employed to determine whether WAMZ can achieve selected Macroeconomic Convergence Criteria (MCC) in the long-run. From the study, we found that WAMZ is not a full potential candidate for ECO Economic and Monetary Union (EMU) due to the inability of the available results to show overall shock asymmetry in the entire models studied. Also, the study found that WAMZ could attain convergence in its inflation targets, but could not attain convergence in its GDP targets. Thus the results imply that in the long-run, WAMZ does not practically possess the attribute to achieve its MCC. Hence, it is imperative that for the adoption of the ECO currency, WAMZ should design and implement a short-run adjustment method to manage country-wise shocks and implement structural buffers to guard the WAMZ economies against structural shocks. Hence, we recommend that ECO currency be a reserve currency managed by the West African Currency Board (WACB) while the EMU member maintains its domestic currency. WAMZ is basically a quasi EMU.

This article examines the process of loan interest rate formation in Bulgaria. While the standard approach in the literature on interest rate pass-through is focused on the impact of changes in the domestic money market rate, the objective of this study is to adapt the existing interest rate pass-through analysis to the case of a country with a currency board arrangement. To this end, the role of money market conditions in the euro area and the influence of the domestic business climate are taken into account. The impact of these factors on loan interest rates in Bulgaria is examined through symmetric as well as asymmetric error-correction models. The analysis identifies specific patterns in the response of loan interest rates depending on the sector of the borrower, the currency denomination and the maturity of loans.

We provide a novel comparison between the behavioural and the non-parametric microsimulation approach. Coupled with a CGE model, we consider the distributional effects of the significant capital outflows faced by the Argentinean economy at the end of its Currency Board, in a context with significant macroeconomic similarities to the present crisis in Greece. Both the relatively straightforward ‘non-parametric’ approach and the more complex behavioural approach lead to distributional results that are consistent with the data, suggesting that both are viable alternatives. Looking forward, it would be desirable for researchers to look for additional evidence regarding the distributional effects that these microsimulation models can illuminate for given macroeconomic shocks.

This paper is also concerned with the evolution of the monetary system, but it is narrowly normative. It stresses the role of the policy domain, not the currency domain, and argues that the nature of the policy domain–the way in which monetary policy is made–deserves more attention than it usually receives. The comparative merits of the various ways in which countries can fix their exchange rates–unilateral dollarization, a currency board, or a full-fledged monetary union–depend largely on the monetary-policy domains that correspond to those regimes. The case for reinforcing a monetary union with a fiscal federation also depends on the policy domain of the monetary union.

This paper explores New Zealand’s early monetary history, examining its colonization and the events leading up to the establishment of the Colonial Bank of Issue, an early currency board. It describes the operations of the bank during its six-year stint as the colony’s sole note issuer. An accompanying spreadsheet workbook contains the statistics of the Colonial Bank of Issue.Keywords. New Zealand, Colonial Bank of Issue, Currency board, George Grey.JEL. E59, N17.

Bosnia and Herzegovina is a small and open economy in transition with great distrust in local authorities and institutions. The country applies a currency board as the only acceptable and optimal exchange rate system in order to protect its monetary policy from political influences. The strict rules of the currency board provide monetary stability and confidence in the domestic currency, but disable the pursuit of discretionary monetary policy and limit autonomous fiscal policy for the purpose of stimulating an investment cycle and economic development without coordinated accompanying support of monetary policy.The subject of this paper is an analysis of the short-term and long-term effects of the currency board application in Bosnia and Herzegovina in conditions of increasing liberalization through the process of European integration. Given the negative consequences and limitations of the currency board system, this paper analyses in particular the possibility of introducing a central bank with discretionary monetary policy instruments, as well as other measures that can influence the overvaluation of the domestic currency exchange rate.The scientific methods used in the paper are: inductive-deductive method, descriptive method and statistical method. The conclusion and recommendations areobtained by using inductive-deductive method and descriptions of current economictrends based on numerous secondary statistical data presented in the tables andcharts.

U radu se analizira tečajni režim valutnog odbora i njegove prednosti i nedostaci. Valutni odbor je monetarno-devizna institucija koja emitira novčanice i kovanice u potpunosti zamjenjive za rezervnu valutu po trajno fiksnom tečaju. Rad daje sustavan pregled podjele tečajnih režima i kriterija za njihov izbor. Objašnjene su razlike između tradicionalnih i modernih valutnih odbora, definirane su značajke valutnog odbora uz poseban naglasak na prednosti i nedostatke, te je dan osvrt na razloge odabira i uvođenja valutnog odbora kao i stanje zemalja prije i nakon korištenja tog režima., This paper analyses the currency board arrangement and its advantages and disadvantages. The currency board is monetary and foreign exchange institution that issues banknotes and coins that can be completely exchangeable for reserve currency at permanently fixed exchange rate. The paper provides a systematic overview of the exchange rate regimes and criteria for their choice. The differences between the traditional and modern currency boards have been explained, the features of the currency board are defined, with a special emphasis on the advantages and disadvantages, and a review of the reasons for selecting and installing a currency board is given as well as the condition of the countries before and after the use of the regime.

The Philippine monetary system and data from 1903-1948are examined, using general observations and statistical tests to determine to what extent the system operated as a currency board. This paper makes detailed annual balance sheets of the monetary system available in machine-readable form for the first time, in a companion Excel workbook.Keywords. Philippines, Currency board, Gold standard fund, Currency reserve fund, Exchange standard fund.JEL. E59, N15.

We first analyze the orthodoxy of the Qatar and Dubai Currency Board (1966-1973) through analysis of legislation and statistical tests based on balance sheet data. We then compare an analysis of economic factors such as wage growth, inflation rate, etc. during the currency board period to the post-currency board period. We also provide the history of the currency board’s issue of notes. A companion spreadsheet workbook shows the board’s note issue, balance sheet, and other data in machine-readable form.Keywords. Qatar, Dubai, currency board.JEL. E59, N25.

The paper discusses the feasibility of a unified currency among the Gulf Cooperation Council (GCC) countries and suggests policies to be used should it be implemented. Several other currency unions are examined as inspiration for policies and strategies to apply to the GCC’s prospective currency union.Keywords. Gulf Cooperation Council, Central bank, Currency board, Currency union, Monetary union.JEL. E52, E58.

The research area of the survey is the balance sheet items of the Bulgarian National Bank (BNB), and the subject - the convergent aspects of the BNB balance sheet items for the period 01.2006 to 03.2018. The purpose of the survey is to identify under the currency board conditions as well as the dynamics, trend and risk parameters of the BNB balance sheet items, focusing on the currency risk of USD-denominated balance sheet positions and the correlation of these positions with the GDP of Bulgaria. Therefor a special focus is placed on currency risk in USD-denominated balance sheet items. The thesis tests the existence of a direct link between dynamics in the BNB balance sheet positions and the growth of GDP, taking into account force majeure factors.

We introduce an environmental dimension into a real-business-cycle model augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999–2016). We investigate the quantitative importance of utility-enhancing environmental quality, and the mechanics of an ‘environmental’ output tax levied on the polluting firm’s output, as well as the effect of government spending on pollution abatement over the cycle. In particular, a positive shock to pollution emission in the model works like a positive technological shock, but its effect is quantitatively very small. Overall, the model performs relatively well when evaluated against data, but less so along the environmental dimension, so more research is needed to understand the aggregate effects of pollution.

The goal of this thesis is to study the specificity and sustainability of the Djibouti Currency Board. For this, we will proceed in two steps. First, we will study the specificity of the Djibouti monetary regime, based on the Currency Board, compared to other contemporary monetary experiences. Its peculiarity stems from the fact that the Djiboutian monetary system is based on credible commitments that conform to orthodox canons, which is not the case for all modern currency boards. This is verified for the Board of Djibouti by the absence of discretionary monetary instruments. Also, we insist upon this contrast by its longevity with contemporary monetary arrangements. Since its introduction in 1949, the Board of Djibouti has not been concerned about its ability to operate. Building upon our first observation, for our second step, we work to identify the conditions of success of the Board of Djibouti, including the factors of sustainability linked to this monetary regime. This thesis demonstrates that the sustainability of this monetary regime, as the oldest currency board in the world, is based on regional and international integration. It also states that the characteristics of the economy are one of the main factors in its success. Finally, the thesis highlights that the internal and external imbalances of the economy pose the risk of dropping the Djibouti franc to the US dollar. The weakness of the banking system, the quality of institutions, and overvalued exchange rates are signals of a debt crisis. The increasing use of external debt highlights the government's inability to reconcile rigorous public debt management with restrictive monetary policy. The amount and structure of public and external indebtedness on one hand, and the imbalance of the exchange rate on the other, are sources of uncertainty about the long-term sustainability of this monetary regime. In the absence of discretionary room for maneuver, the credibility and sustainability of the monetary regime depend on the government's ability to address these macroeconomic imbalances., L’objectif de cette thèse est d’étudier la spécificité et la soutenabilité du Currency Board de Djibouti. Pour cela, nous allons procéder en deux étapes. Dans un premier temps, nous étudierons la spécificité du régime monétaire djiboutien fondé sur le Currency Board par rapport aux expériences monétaires contemporaines. Sa particularité résulte du fait que le régime djiboutien est fondé sur des engagements crédibles et conformes aux canons orthodoxes, ce qui n’est pas le cas des caisses d’émission modernes. Celle-ci est vérifiée pour le Board de Djibouti par l’absence des instruments monétaires discrétionnaires. Aussi, nous insisterons que celui-ci contraste par sa longévité avec les arrangements monétaires contemporains. Depuis son introduction en 1949, le Board de Djibouti n’a pas été inquiété dans son fonctionnement. Partant de ce constat, nous nous attacherons, dans un second temps, à identifier les conditions de son succès et les facteurs de la soutenabilité de ce régime. Étant la caisse d’émission la plus ancienne du monde, la thèse démontrera que la pérennité de ce régime monétaire repose sur une intégration régionale et internationale. Aussi, elle établira que les caractéristiques de l’économie constituent un de principal facteur de sa réussite. Enfin, la thèse mettra en évidence que les déséquilibres interne et externe de l’économie posent réellement le risque de décrochage du franc Djibouti au dollar américain. Faiblesse du système bancaire, de la qualité des institutions et taux de change surévalué est un signal d’une crise de la dette. Le recours croissant à l’endettement extérieur souligne l’incapacité du gouvernement à concilier une gestion rigoureuse de la dette publique et d’une politique monétaire restrictive. Le montant et la structure des endettements publics et externes d'une part, le déséquilibre du taux de change d'autre part, sont sources d'incertitude sur la soutenabilité à long terme de ce régime. En l’absence de marges de manœuvres discrétionnaires, la crédibilité et la soutenabilité du régime monétaire dépendent de la capacité du gouvernement à résoudre ces déséquilibres macroéconomiques.

This document analyzes the interactions between macroeconomic regimes, employment generation and the dynamics of labor incomes in Argentina under two different macroeconomic regimes: the currency board regime of the 1990s and the high real exchange rate regime that followed. The former, characterized by a strong currency overvaluation, had a negative impact on economic activity and the labor market. However, the maintenance of a competitive real exchange rate does not by itself guarantee the sustained positive performance of the labor market, as it became evident in Argentina during the 2000s. Although the sizable depreciation of the peso -together with a positive international context- favored the expansion of output and employment, the initial concern of maintaining the real exchange rate at a competitive level was not continued with policies aimed to counteract the appreciation trend that appeared a few years after the implementation of the new regime. Resumo: Este artigo analisa as interações entre regimes macroeconômicos, geração de empregos e a dinâmica dos rendimentos laborais na Argentina sob dois regimes macroeconômicos distintos: o regime de currency board dos anos 90, e o subsequente regime de altas taxas reais de câmbio. O primeiro, caracterizado por forte sobrevalorização cambial, teve impacto negativo sobre a atividade econômica e o mercado de trabalho. Entretanto, a manutenção de uma taxa real de câmbio competitiva não garante, por si mesma, um desempenho positivo sustentável do mercado de trabalho, como se tornou evidente na Argentina durante a década de 2000. Embora desvalorizações significativas do peso - assim como um contexto internacional favorável - favoreceram a expansão do produto e do emprego, a preocupação inicial com a manutenção da taxa real de câmbio em níveis competitivos não foi complementada com políticas voltadas para conter a tendência de apreciação que surgiu alguns anos após a implementação do novo regime.

The paper examines the monetary policy actions through which central banks in sub-Saharan Africa have tried to eliminate the negative impacts of the shocks facing their economies. We compare two different monetary policy regimes: a currency board regime (in the CFA zone) and an inflation targeting policy regime (Ghana and South Africa) when central banks respond to demand, supply, and fiscal shocks. We extend the usual forecasting and policy analysis system models to replicate the economic features of these economies during the period 2002–12 and to evaluate the impact of several policies in response to these shocks. We find that both policies are inappropriate in helping the economies escape from the effects of negative demand shocks, both are essential when negative shocks to primary balance occur, while inflation targeting dominates the currency board regime as a strategy to cope with positive shocks to inflation.

This study aims to compare the performance of free-floating and currency board regimes for Hong Kong by examining historical data of the two on the output growth and inflation rate. Structural vector autoregression has been applied in the empirical analysis. Without making a strong assumption of unit variance in the residual matrix, this study applies a more natural approach proposed by Cecchetti and Rich to recover the structural parameters. The study has further investigated the recovery of the economy under a demand shock under different exchange rate regimes, in order to provide some evidence to answer why Hong Kong's recovery process after the Asian financial crisis is relatively longer than that in other economies with a managed floating exchange rate regime. New evidence in this study indicates that output recovers much faster in a flexible exchange rate regime than in a fixed exchange rate regime after an aggregate demand shock. Furthermore, this study has applied a more robust method in the counterfactual analysis when comparing the two regimes. New evidence in this study suggests that a free-floating regime may generate much smaller output variance in Hong Kong and deliver higher output and price levels to Hong Kong.

Member states of the Eastern Caribbean Currency Union (ECCU) experienced a secular decline in growth following the great recession circa 2008, resulting in increased unemployment and social dislocation. Given the ECCU's currency board arrangement and current fiscal challenges, policy options for resuscitating growth are limited to supply-side adjustments. This paper contends that the 3 per cent interest rate floor on savings deposits has contributed to higher lending rates and lower levels of capital formation. Ultimately it is a drag on growth and a threat to the banking sector's health as it has resulted in reduced risk compensation when default and other banking sector risks have risen. Revisiting the floor is advocated as an integral component of this structural adjustment policy response.

We estimate the correlation of foreign bank penetration and dollarization with competition in the banking industry in sixteen Latin American countries during the period 1995–2008. We apply Boone’s methodology to compute the intensity of competition. Our results suggest that in countries with an initial low level of competition, foreign ownership tends to foster rivalry among banks, whereas the opposite is true in countries with an initial high level of competition. The adoption of dollarization or a currency board, which reduces transaction costs and facilitates financial integration, has a positive correlation with competition. This is the case for Ecuador, El Salvador, and Argentina.

Along with the process of globalization, interest rates have become a significant benchmark for the effectiveness of banking policies in the money market. In this regard, the focus of the research is the interdependence of central bank interest rates and interest rates on the interbank money market (EONIA, EURIBOR, LIBOR SONIA and OIS). The paper analyzes the movement of reference interest rates and their variability over time, depending on the effect that the monetary authorities want to achieve. Interest rates on interbank money market and interdependence in the movements of interest rates in the period from 2006 till 2016 have been examined and a positive correlation between them was found. In contrast, the reference interest rates of the leading central banks were moving in line with the monetary authorities’ objectives, so the movements had different directions.During the observed period, the Central Bank of Bosnia and Herzegovina adjusted the interest rates on the financial markets of euro denominated instruments and yields. The correlation between the interest rates of the European Central Bank for the main refinancing operations and the average weighted interest rate of the Central Bank of Bosnia and Herzegovina is justified by the use of the currency board in Bosnia and Herzegovina.

The development of the Bulgarian banking system is a complex and dynamic process that is driven by the effect of both internal and external factors. The country’s membership in the EU favours inflow of foreign capital into the system in the form of the purchases of most Bulgarian commercial banks. The domination of European capital forms a number of positives but also possibilities for distress by line of ownership. As a Member State of the EU with derogation, Bulgaria does not participate in the European Monetary Union. However, apart from the choice of the euro as a nominal anchor of the Currency Board, it can also be observed that there is tighter integration with the European financial system and, over the last few years, government declarations expressing the desire to become a full member of the Eurozone. That leads to commitments that demonstrate the viewpoint that it is possible to achieve significant improvements of the main dimensions of the system’s functionality while also increasing its credibility in the eyes of Bulgarian consumers of bank services and European investors. In 2014, the Bulgarian bank system faced a serious challenge – the crisis surrounds Corporate Commercial Bank (CCB), one of its biggest commercial banks. The goal of this article is to examine the methods, effectiveness and costs of stabilizing the system. At the same time, the authors also examine the approaches that would have been applicable to the same situation had the country been a member of the European Banking Union and had CCB been under the Single Supervisory Mechanism. The task, based on the above-mentioned case, to evaluate the positives and potential negatives of Bulgaria joining the Banking Union and to support membership in the European Banking Union. That would contribute towards additional stabilization of the Bulgarian banking sector and more effective resolution of capital adequacy issues, liquidity, solvency and security.

The monetary policy of Bosnia and Herzegovina (hereinafter referred to as BIH) operates under the currency board system, responsible for strengthening the market economy and price stability. On the other hand, the economy of BIH is facing long-term unemployment, unfavorable business environment and feeble competitive position. This discourages economic development. Further retaining the currency board system in BIH attracts great interest. The paper analyzes the relation among inflation, unemployment and foreign direct investment (FDI). Statistical analysis (coefficient of correlation and simple linear regression (period 2004/2014)) indicates that there is no inversion similar to the Phillips curve between inflation and unemployment. Thus, it is implied that BIH renounces employment, aggregate demand and economic growth for the sake of stable prices. Moreover, the ratio of inflation and participation of FDI in GDP is inverse with a negligible correlation. Analyses demonstrate that there is no optimal combination of inflation and unemployment in BIH that would improve business environment and stimulate FDI and aggregate demand. Correlation and regression analyses fail to provide the arguments to statistically challenge the currency board as the monetary system model of BIH.

This is the second in-depth report which discusses the possibility that the Kong Kong Dollar (HKD) will cease to be determined by the currency board system. In the previous report, the author discussed the unsustainability of pegging the HKD to the USD when the Chinese economy is deteriorating and the Fed is increasing interest rates. The first report proposed a de-pegging in the near future in order to mitigate costs while the HKD is still strong in view of capital inflows from the mainland. Such a decision could lead to a win-win situation for both the Hong Kong (HK) government and investors. However, governments frequently lack the capacity to choose the best options. Therefore, the HK government is likely to maintain the current system, even at a high social and economic cost, in the expectation that the environment will change and relieve it from pressure. This could happen, for example, if the Chinese economy rebounded. Considering that the HK government owns huge amounts of foreign reserves, it is not easy for investors to pick the best time to speculate on a de-pegging of the HKD. An HKD crisis might come about following a collapse of the housing bubble in mainland China. This report covers several methods which can be adopted to gauge the risks associated with a de-pegging of the HKD and a collapse of Chinese housing bubble. It is believed that the crisis will eventually come, whether the HKD is de-pegged or not, and there will be huge trading/arbitrage opportunities. In this regard, careful research and review of the HK government’s massive intervention during 1997 is insightful. At the same time, identifying the impact of a de-pegging on Hong Kong’s local companies and determining the most vulnerable parts of the system can increase investors’ chances of success. The recent development of the Hong Kong bond market might provide a good goal.

Diploma thesis on Argentine financial crisis deals with the biggest financial crisis in the country's history, which took place at the turn of 2001/2002. This paper examines economical and political development before the crisis, what caused it, its impacts and how it could be prevented. The aim of this paper is to analyze the causes of the crisis. The secondary goal of this paper is to assess whether and how this crisis could have been avoided or at least how the effects could be mitigated.

Chapter 1 analyzes Jamaica’s foreign currency flow with the rest of the world and puts the research into proper context. It explores the rationale for each exchange rate regime and their impact on the progression of the nation’s economy. Since gaining independence from Britain in 1962, Jamaica has employed five main types of exchange rate strategies. Each was designed to achieve specific objectives of the government, taking the local and global economic environment into account. Jamaica’s exchange rate regime moved from a currency board to a crawling peg to a dual exchange rate, then to an auction and allocation system and finally to a free-floating exchange rate system.