The position taken by politicians and important pressure groups in Germany concerning EMU will depend to a large extent on its labour market implications - and thus on the (perceived) impact of exchange rate variability on employment and unemployment. Most economists would assume this impact to...

This paper shows that countries with weak banking system and fiscal institutions, should benefit from the presence of foreign banks, which can constitute a commitment and transparency device. Foreign banks can also reduce the probability of self-fulfilling speculative attacks. A strong presence...