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In this paper we study dollarization as a commitment device that the Central Bank could use to avoid getting involved … differs from the one that a benevolent Central Bank would want to implement. Dollarization then could be used to restore the … dollarization, the introduction of international banks, and the political process, we find that bank internationalization may help …
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In the presence of macroeconomic shocks severe enough to threaten the liquidity or solvency of the banking system, the regulator can rely on the funds concentration effect to save long-term investment projects. Some banks are forced into bankruptcy with the result that other banks obtain more...
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