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Author: Emre Ozsoz Publisher: Walter de Gruyter GmbH & Co KG ISBN: 3110437023 Category : Business & Economics Languages : en Pages : 140
Book Description
A very commonly observed phenomenon in developing and emerging market economies is the use of another country’s currency (whether the US dollar or another currency) in lieu or in addition to the local currency. The most common type of this financial phenomenon is partial (de facto) dollarization where foreign currencies are used side by side with local currency for saving and borrowing purposes in addition to serving as medium of exchange. Governments in these countries have been encouraging dollarization for years by allowing their citizens to save and borrow from local banks in foreign currency. Yet the existence of multiple currencies on banks' balance sheets on both the asset and liability side poses risks to the health and stability of the banking system. This book evaluates the practical aspects of partial dollarization in countries such as Turkey, South Korea, Peru, and Cambodia among others. Starting with the origins of the phenomenon, the impact on banking systems and financial depth of the credit markets are discussed along with risks to the banking systems. Challenges faced by Central Banks and banking regulators are evaluated using recent country studies.
Author: Emre Ozsoz Publisher: Walter de Gruyter GmbH & Co KG ISBN: 3110437023 Category : Business & Economics Languages : en Pages : 140
Book Description
A very commonly observed phenomenon in developing and emerging market economies is the use of another country’s currency (whether the US dollar or another currency) in lieu or in addition to the local currency. The most common type of this financial phenomenon is partial (de facto) dollarization where foreign currencies are used side by side with local currency for saving and borrowing purposes in addition to serving as medium of exchange. Governments in these countries have been encouraging dollarization for years by allowing their citizens to save and borrow from local banks in foreign currency. Yet the existence of multiple currencies on banks' balance sheets on both the asset and liability side poses risks to the health and stability of the banking system. This book evaluates the practical aspects of partial dollarization in countries such as Turkey, South Korea, Peru, and Cambodia among others. Starting with the origins of the phenomenon, the impact on banking systems and financial depth of the credit markets are discussed along with risks to the banking systems. Challenges faced by Central Banks and banking regulators are evaluated using recent country studies.
Author: Ed Malo Publisher: GRIN Verlag ISBN: 366802099X Category : Business & Economics Languages : en Pages : 19
Book Description
Seminar paper from the year 2008 in the subject Economics - Finance, grade: 90, , course: International Trade Seminar, language: English, abstract: The purpose of this paper is to explore dollarization, specifically the type that involves the adoption of the U.S. Dollar as official currency by foreign nations. An overview of the definition of dollarization will be given along with an analysis of the motivation to dollarize and one economist’s process of dollarization. Cases of countries that have officially dollarized to the U.S. Dollar will be identified and explored in detail. The pros and cons to these foreign countries will also be summarized and directions for future research will be given. Dollarization is not a recent occurrence in the international community, but with the official adoption of the U.S. Dollar by several countries over the last decade, it has gained significant attention. Governments, international organizations such as the U.N., the World Bank, The International Monetary Fund, as well as economists and other scientists have all over the past ten years been paying far more attention than previously to dollarization. First, a complete definition and brief history of dollarization will be presented followed by the motivating factors behind a nation’s decision to dollarize. One economist’s process for dollarization is also presented. Next, some Pros and Cons are summarized followed by an overview of the example nations that have dollarized will be given followed by the beginning of my focus on Latin America as a region apparently prone to dollarization and why. The balance of the paper will be devoted to two case studies presenting in depth information about two Latin American countries that have officially adopted the U.S. Dollar, El Salvador, and Ecuador. Finally, directions for future research are presented.
Author: Eduardo Levy Yeyati Publisher: MIT Press ISBN: 9780262122504 Category : Business & Economics Languages : en Pages : 364
Book Description
Theoretical and empirical analysis of de jure dollarization. With the persistent instability of international financial markets, emerging economies are exploring new ways to reduce exposure to capital flow volatility. Some analysts argue that financially open economies are best served by more flexible regimes, while others argue in favor of extreme exchange rate regimes that have a strong commitment to a fixed parity or dispense with an independent currency. The successful launch of the euro has made more realistic the prospect of replacing a national currency with a strong foreign one. Recent examples include the adoption of the US dollar by Ecuador and El Salvador. The introduction of a foreign currency as sole legal tender, termed full (de jure) dollarization, has been the center of much political and academic debate. This book provides a comprehensive analysis of the issues from both theoretical and empirical perspectives. The topics discussed include the role of balance sheet effects, the linkage between currency risk and country risk, the impact of dollarization on trade, financial integration and credibility, the implications of dollarization for the lender of last resort, and the institutional and political economy aspects of dollarization.
Author: MissNkunde Mwase Publisher: International Monetary Fund ISBN: 1484366913 Category : Business & Economics Languages : en Pages : 31
Book Description
The economic literature has examined deposit dollarization in nominal terms, typically focusing on the ratio of foreign currency deposits to broad money. However, while private agent demand for foreign currency may remain unchanged in foreign currency terms, there could be large fluctuations in the dollarization ratio simply due to exchange rate movements. This paper proposes a new approach to measuring dollarization that removes these exchange rate effects, and demonstrates that beyond the variance of inflation and depreciation, the level of inflation and size of depreciation also matter for dollarization. While dollarization in nominal terms surged during the recent global financial crisis, there was a downward trend in real terms. Employing a set of econometric estimators, this paper investigates whether “real” dollarization during 2006–09 was associated with the crisis, and the role of initial macroeconomic conditions, quality of institutions, risk aversion, and prudential measures. We find that exchange rate appreciation and reductions in sovereign risk do moderate dollarization; but the results for global volatility have low statistical significance, perhaps because global shocks tend to preserve, to a large extent, relative attractiveness of foreign assets. Nonetheless, estimated impulse-response functions point to a large but short-lived positive impact of global volatility on dollarization, which could reflect economic agents heightened concerns about spillover effects of global uncertainty on the domestic economy.
Author: Jeffrey J. Fox Publisher: John Wiley & Sons ISBN: 0471694231 Category : Business & Economics Languages : en Pages : 274
Book Description
How companies turn value-added into real profits The Dollarization Discipline shows organizations and marketers how to effectively communicate the economic value created by their products and services. Too often, when companies compete using conventional sales and marketing approaches, they force customers to make financial decisions (how much to spend), based on non-financial arguments (product features and benefits). On this playing field, the company that can show true financial advantage in real dollars and cents wins every time. This book offers a step-by-step strategy for doing just that. Every day, good companies suffer because they create value for customers but aren't able to keep their fair share. This is because most marketers can't fully explain the value customers get from their products, and the argument falls to the lowest common denominator-price. The solution is an approach to sales and marketing that goes beyond articulating features and benefits, but calculates the monetary value a customer receives from a product or service. This enables the seller to price the product as a true reflection of its value-and also let's the seller prove it to the customer! With real case studies and detailed, step-by-step guidance on effective dollarization, The Dollarization Discipline finally offers a practical, straightforward way for marketers and business leaders to prove the value of their "value-added." Jeffrey J. Fox (Gilford, New Hampshire) is the founder and President of Fox & Company, Inc., a marketing consulting firm. Fox is also the author of the bestsellers How to Become a CEO, How to Become a Rainmaker, and How to Become a Great Boss. Richard C. Gregory (Farmington, Connecticut) is a Senior Consultant with Fox & Company.
Author: Mr.Juan S Corrales Publisher: International Monetary Fund ISBN: 1484393198 Category : Business & Economics Languages : en Pages : 45
Book Description
Using a newly complied and extended database from International Financial Statistics, and applying different panel-regression techniques, this paper documents the evolution of households’ and firms’ dollarization over the past decade. We assess the macroeconomic determinants of dollarization for households and firms and explore differences between high and low-income countries. We find that households’ and firms’ dollarization in loans and deposits are weakly explained by the currency substitution model, except in low income countries, where inflation plays a significant role. Instead, market development variables such as financial deepening, access to external debt and FX finance as well as other market considerations are key to explain the dynamics of deposits and loans dollarization, regardless of the level of income.These factors can account for a significant fraction of the dollarization, but using a variance decomposition model, there is evidence that a non-negligible portion has yet to be explained. This suggests that there are key determinants for household and firm dollarization that are not fully captured by traditional macroeconomic explanatory variables.
Author: Dominick Salvatore Publisher: Oxford University Press, USA ISBN: 019515536X Category : Business & Economics Languages : en Pages : 491
Book Description
This book takes a global approach to one of today's most controversial topics in business: Dollarization. With the collapse of the former Soviet Union, and the formation of the Euro in Europe, many countries are debating whether or not a common currency is in their best interest. This intriguing volume brings together the leading participants in the current dollarization debates.
Author: Patrick Honohan Publisher: World Bank Publications ISBN: Category : Banks and banking Languages : en Pages : 52
Book Description
De Nicolo, Honohan, and Ize assess the benefits and risks associated with dollarization of the banking system. The authors provide novel empirical evidence on the determinants of dollarization, its role in promoting financial development, and on whether dollarization is associated with financial instability. They find that: The credibility of macroeconomic policy and the quality of institutions are both key determinants of cross-country variations in dollarization. Dollarization is likely to promote financial deepening only in a high inflation environment. Financial instability is likely higher in dollarized economies. The authors discuss the implications of these findings for financial sector and monetary policies.
Author: Manuel Hinds Publisher: Yale University Press ISBN: 0300129777 Category : Business & Economics Languages : en Pages : 295
Book Description
In this elegantly written book, Jerome Kagan melds the history of the field of psychology during the past 50 years with the story of his own research efforts of the same period and an analysis of what he terms 'the currently rocky romance between psychology and biology'. As Kagan unwinds his own history, he reveals the seminal events that have shaped his career and discusses how his assumptions have changed. With full appreciation for the contributions to psychology of history, philosophy, literature and neuroscience, he approaches a wide range of fascinating topics, including: the abandonment of orthodox forms of behaviourism and psychoanalysis; the forces that inspired later-twentieth-century curiosity about young children; why B. F. Skinner chose to study psychology; why the study of science less often ignites imaginations today; our society's obsession with erotic love; and, the resurgence of religious fanaticism and the religious Right. Embedded in Kagan's discussions is a rejection of the current notion that a mature neuroscience will eventually replace psychology. He argues that a complete understanding of brain is not synonymous with a full explanation of mind, and he concludes with a brief prediction of the next five decades in the field of psychology.
Author: Mr.Eduardo Borensztein Publisher: International Monetary Fund ISBN: 9781557759931 Category : Business & Economics Languages : en Pages : 28
Book Description
Analyzes the costs and benefits of full dollarization, or the adoption by one country of another country’s currency. Potential advantages include lower borrowing costs and deeper integration into world markets. But countries lose the ability to devalue, and become dependent on the U.S. Compares with currency board option.
Author: Emre Ozsoz
Author: Emre Ozsoz
Author: Ed Malo
Author: Eduardo Levy Yeyati
Author: MissNkunde Mwase
Author: Jeffrey J. Fox
Author: Mr.Juan S Corrales
Author: Dominick Salvatore
Author: Patrick Honohan
Author: Manuel Hinds
Author: Mr.Eduardo Borensztein