TY - UNPB
T1 - Outsourcing central banking
T2 - Lessons from Estonia
AU - Khoury, Sarkis Joseph
AU - Wihlborg, Clas
PY - 2005
Y1 - 2005
N2 - The literature on Currency Boards (CB) stops at the water edge in terms of dealing with the totality of the functions of a central bank. Monetary policy, and banking supervisioncan be "outsourced" in an open economy with substantial foreign direct investment (FDI)in the banking sector if political nationalism does not trump economic rationality. An orthodox CB renders the central banking function redundant in terms of interest rate and exchange rate determination. FDI in banking could perform the same role for the supervisory function of central banks. We use the case of Estonia to illustrate the feasibility of, and constraints on, outsourcing of central bank functions. A brief discussion of the Argentinian experience is used for contrast.Key words: Currency Board, Foreign Banks, Supervision, Regional Integration,outsourcing.
AB - The literature on Currency Boards (CB) stops at the water edge in terms of dealing with the totality of the functions of a central bank. Monetary policy, and banking supervisioncan be "outsourced" in an open economy with substantial foreign direct investment (FDI)in the banking sector if political nationalism does not trump economic rationality. An orthodox CB renders the central banking function redundant in terms of interest rate and exchange rate determination. FDI in banking could perform the same role for the supervisory function of central banks. We use the case of Estonia to illustrate the feasibility of, and constraints on, outsourcing of central bank functions. A brief discussion of the Argentinian experience is used for contrast.Key words: Currency Board, Foreign Banks, Supervision, Regional Integration,outsourcing.
KW - Tilsyn med finansielle institutioner
KW - Estland
KW - Centralbanker
KW - Valutapolitik
KW - Currency boards
M3 - Working paper
BT - Outsourcing central banking
CY - København
ER -