This study examines the key drivers of sovereign default risk in five euro area periphery countries and three euro-candidates that are currently pursuing independent monetary policies. We argue that the recent proliferation of sovereign risk premiums stems from both domestic and international...

This paper analyses capacity building and institutional development in the banking and capital market sectors of formerly planned economies in Central and Eastern Europe. While the existing literature mostly addresses the specific situation of banks and capital markets in a particular country or...

This study examines the impact of various monetary policy regimes on the ability to lower inflation and exchange rate risk premiums in the EU accession countries as they undergo monetary convergence to the eurozone. It proposes a monetary policy framework of flexible targeting of relative...

We advocate a dynamic approach to monetary convergence to a common currency that is based on the analysis of financial system stability. Accordingly, we test empirically volatility dynamics of the ten-year sovereign bond yields of the 2004 EU accession countries in relation to the eurozone...

This project analyzing the development of Polish financial markets sponsored by the USAID grant was aimed at examining selected problems of the banking system and financial markets in Poland. The main criterion for selection of these problems was their potential usefulness for policy-makers at...

We demonstrate that bond yield compression is under way in the countries converging to the euro and that German yields are significant drivers of local currency yields. Based on the evidence from Poland, Hungary and the Czech Republic, we conclude that these new Member States of the European...

Monetary policies of Poland, Hungary and the Czech Republic have undergone a significant transformation in the 1990s. The initial currency peg and the exchange-rate-based monetary policy have been gradually replaced by more flexible exchange rates and money-based policies. Preparations for...

This study proposes relative inflation forecast targeting as an operational framework of monetary policy for adopting the euro by the EU new Member States. This strategy assumes containing differentials between the domestic and the eurozone inflation forecasts as an operational target. A model...