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An exchange rate regime is a way a monetary authority of a country or currency union manages the currency about other currencies and the foreign exchange market.It is closely related to monetary policy and the two are generally dependent on many of the same factors, such as economic scale and openness, inflation rate, the elasticity of the labor market, financial market development, and ...
A currency crisis is a type of financial crisis, and is often associated with a real economic crisis. A currency crisis raises the probability of a banking crisis or a default crisis. During a currency crisis the value of foreign denominated debt will rise drastically relative to the declining value of the home currency.
For example, some models of currency crises (including that of Paul Krugman) imply that a fixed exchange rate may be stable for a long period of time, but will collapse suddenly in an avalanche of currency sales in response to a sufficient deterioration of government finances or underlying economic conditions.
Managed float regime; Dual exchange rate; List of countries by foreign-exchange reserves; Markets; Foreign exchange market; Futures exchange; Retail foreign exchange trading; Assets; Currency; Currency future; Currency forward; Non-deliverable forward; Foreign exchange swap; Currency swap; Foreign exchange option; Historical agreements; Bretton ...
A currency board combines three elements: an exchange rate that is fixed to another, “anchor currency”; automatic convertibility or the right to exchange domestic currency at this fixed rate whenever desired; and a long-term commitment to the system. A currency board system can ultimately be credible only if central bank holds official ...
The Four Corners model, often referred to as the Four Party Scheme is the most used card scheme in card payment systems worldwide. This model was introduced in the 1990s. It is a user-friendly card payment system based on an interbank clearing system and economic model established on multilateral interchange fees (MIF) paid between banks or other payment institutions.
In 1988, economist James Parthemos, a former senior vice president and director of research at the Federal Reserve Bank of Richmond, wrote for the bank's Economic Quarterly, "This so-called commercial loan theory or real bills doctrine was a basic principle underlying the money functions of the new system. The essential fallacy in the doctrine ...
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold or silver.