Common determinants of currency crises: the role of external balance sheet variables

2010 ◽  
Vol 16 (3) ◽  
pp. 237-255 ◽  
Author(s):  
Mirko Licchetta
Keyword(s):  
Currency Crises ◽  
Balance Sheet ◽  
External Balance

Argentina Currency Peg and Fiscal Reforms (A)

2017 ◽  
pp. 1-4
Author(s):  
Nabil Al-Najjar ◽  
Simone Galperti
Keyword(s):  
World War Ii ◽  
Currency Crises ◽  
Market Regulation ◽  
Government Control ◽  
Monetary Policies ◽  
Inflation Rates ◽  
Fiscal Reforms ◽  
Base Management ◽  
Currency Pegs

Case (A) starts by reviewing several attempts made by three consecutive Argentine governments between 1973 and 1989 to fight the three-digit inflation rates that had troubled the country since the end of World War II. Next, the implementation of the currency peg under the broad umbrella called the “convertibility plan” is discussed and its rationale is explained in connection with the Central Bank's role in controlling inflation and market expectations. The case then outlines the fiscal reforms introduced in the early 1990s concerning public finance, market regulation, and social security. Finally, the outcomes of these policies are briefly summarized.Argentina's currency collapse provides a vivid illustration of the perils of government control on exchange rates in an export-dependent economy. Students will learn and understand (1) the role of herding and expectations in currency collapse; (2) the interdependence of fiscal and monetary policies; (3) monetary base management and its effects on inflation; (4) the advantages and drawbacks of currency pegs; (5) the story of the late 1990s financial and currency crises.

Capital Structure and the Changing Role of Off-Balance-Sheet Lease Financing

2009 ◽  
Author(s):  
Laurel Franzen ◽  
Kimberly Rodgers Cornaggia ◽  
Timothy T. Simin
Keyword(s):  
Capital Structure ◽  
Balance Sheet ◽  
Changing Role

scholarly journals Monetary and Financial Instability and European Bank Interest Margins

2018 ◽  
Vol 5 (1) ◽  
pp. 14
Author(s):  
Victor Mendes ◽  
Margarida Abreu
Keyword(s):  
Exchange Rate ◽  
Currency Crises ◽  
Negative Impact ◽  
Balance Sheet ◽  
Exchange Rate Volatility ◽  
Exchange Rate Policy ◽  
Financial Instability ◽  
European Bank ◽  
Net Interest Margin ◽  
Interest Margins

This paper studies the extent to which financial instability and monetary and exchange rate policy influence European bank net interest margins, controlling for microeconomic variables and allowing for the heterogeneity of the banking industry. The sample is a broad cross-section of balance sheet and income statement information provided by banks from 12 European countries.We conclude that European banks are sensitive to exchange rate and interest rate volatility. They are also affected by their home country’s vulnerability to balance of payment and currency crises, but we find that banks feel differently about the associated risk of liquidity problems depending on their specialization. The instability of international financial markets is not good for banks, insofar as interest and exchange rate volatility both have a negative impact on the net interest margin.

scholarly journals HEDGING, SPECULATION, AND INVESTMENT IN BALANCE-SHEET TRIGGERED CURRENCY CRISES

2007 ◽  
Vol 46 (3) ◽  
pp. 224-233 ◽  
Author(s):  
ANDREAS RÖTHIG ◽  
WILLI SEMMLER ◽  
PETER FLASCHEL
Keyword(s):  
Currency Crises ◽  
Balance Sheet

scholarly journals Self-Fulfilling Currency Crises: The Role of Interest Rates

2006 ◽  
Vol 96 (5) ◽  
pp. 1769-1787 ◽  
Author(s):  
Christian Hellwig ◽  
Arijit Mukherji ◽  
Aleh Tsyvinski
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Rational Expectations ◽  
Currency Crises ◽  
Multiple Equilibria ◽  
Asset Market ◽  
Equilibrium Uniqueness ◽  
Private Signals ◽  
Special Cases

We develop a model of currency crises, in which traders are heterogeneously informed, and interest rates are endogenously determined in a noisy rational expectations equilibrium. In our model, multiple equilibria result from distinct roles an interest rate plays in determining domestic asset market allocations and the devaluation outcome. Except for special cases, this finding is not affected by the introduction of noisy private signals. We conclude that the global games results on equilibrium uniqueness do not apply to market-based models of currency crises.

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