This paper reviews the strategies announced by the ten countries joining the European Union in May 2004 with regard to their intentions for participation in ERM II and the adoption of the euro. The paper examines the economic rationale of the monetary integration strategies declared by most...

Voting power methodology offers insights to understand coalition building in collective decision making. Using cooperative game theory, Banzhaf (1965) developed an index to capture the numerical importance of voters in coalition building. This voting power index is still widely used today in...

Official and unilateral dollarisation/euroisation has become a common policy advice for emerging market economies. Against this background, the paper provides a comprehensive review of all the main cases of dollarisation/euroisation, analysing motives, features and policy implications of this...

This paper focuses on the role of real exchange rate volatility as a driver of portfolio home bias, and in particular as an explanation for differences in home bias across financial assets. We present a Markowitz-type portfolio selection model in which real exchange rate volatility induces a...

The influential work of Obstfeld and Rogoff argues that a closing-up of the US current account deficit involves a large exchange rate adjustment. However, the Obstfeld-Rogoff model works exclusively via demand-side channels and abstracts from possible supply-side changes. We extend the framework...

The paper analyzes whether, and to what extent, emerging market economies (EMEs) have systemic importance for global financial markets, above and beyond their influence during crises episodes. Using a novel database of exogenous economic and political shocks for 14 systematically relevant EMEs,...

After having been at the helm of the international monetary system for decades, the International Monetary Fund was sidelined in policy debates in the past few years. One reason for the IMF not having taken a more central role in addressing key global policy issues in recent years relates to its...

Global financial regulators are currently reflecting on the nature of the insurance business. Specifically, they are trying to classify insurance into traditional' and non-traditional' activities, and to distinguish them from non-insurance' activities. Subsequently, they will seek to apply...

Euroisation/dollarisation – the replacement of the domestic currency by a foreign currency, mostly the US dollar or the euro – has regained significant popularity in recent years, as it is generally regarded as a viable ‘corner solution’ for exchange rate regimes. Part of its...

The opening of formerly planned economies to the world has not only profound consequences for these Central and Eastern European economies. There are also substantial effects on the economies of Western Europe, resulting from enhanced price competition in product markets, migration and capital...