The system of so-called Divergence Indicators in the European Monetary System puts pressure on the monetary authorities to consult before the intervention points are reached in the foreign exchange markets. Under integration aspects this arrangement marks an advance, but it also carries risks...

Critics of the EMS claim that it has failed to realise the hopes aroused at the time of its inception; a convergence of economic policies, they maintain, has not been induced by fixed exchange rates. What is the true position with regard to the convergence of economic policies?

In the past years central banks of major Western industrialised countries have repeatedly attempted to change the trend of the US-Dollar rate by means of intervention in the foreign exchange markets. Our authors analyse the objectives, effects and chances of success of such exchange market...