ch03THE INTERNATIONAL MONETARY SYSTEM(跨國公司財務(wù)管理Joseph F. Greco)

1、1Multinational Financial Management Alan Shapiro 7th EditionJ.Wiley & SonsPower Points byJoseph F. Greco, Ph.D.California State University, Fullerton2CHAPTER 3THE INTERNATIONAL MONETARY SYSTEM3CHAPTER OVERVIEWI.ALTERNATIVE EXCHANGE RATE SYSTEMSII.A BRIEF HISTORY OF THE INTERNATIONAL MONETARY SYT

2、EMIII.THE EUROPEAN MONETARY SYSTEM AND MONETARY UNIONIV.EMERGING MARKET CURRENCY CRISES4PART I. ALTERNATIVE EXCHANGE RATE SYSTEMSI.FIVE MARKET MECHANISMSA.Freely Floating (“Clean Float”)1.Market forces of supply and demand determine rates.5ALTERNATIVE EXCHANGE RATE SYSTEMS2. Forces influenced bya. p

3、rice erest ratesc.economic growth3. Rates fluctuate randomly over time.6ALTERNATIVE EXCHANGE RATE SYSTEMSB.Managed Float (“Dirty Float”)1.Market forces set rates unless excess volatility occurs.2.Then, central bank determines rate. 7ALTERNATIVE EXCHANGE RATE SYSTEMSC.Target-Zone Arrangeme

4、nt1.Rate Determinationa.Market forces constrainedto upper and lower range of rates.b.Members to the arrangementadjust their national economic policies to maintain target.8ALTERNATIVE EXCHANGE RATE SYSTEMSD.Fixed Rate System1.Rate determinationa.Government maintains target rates. b.If rates threatene

5、d, central banks buy/sell currency.c.Monetary policies coordinated.9ALTERNATIVE EXCHANGE RATE SYSTEMSE.Current System1.A hybrid systema.Major currencies:use freely-floating methodb.Other currencies move in and out of various fixed-rate systems.10PART II. A BRIEF HISTORY OF THE INTERNATIONAL MONETARY

6、 SYSTEMI. THE USE OF GOLDA. Desirable propertiesB. In short run: High production costs limit changes.C. In long run: Commodity money insures stability.11A BRIEF HISTORYII.The Classical Gold Standard (1821-1914)A.Major global currencies on gold standard. 1.Nations fix the exchange rate in terms of a

7、specific amount of gold. 12A BRIEF HISTORY2.Maintenance involved the buying and selling of gold at that price.3.Disturbances in Price Levels:Would be offset by the price-specie*-flow mechanism.* specie = gold coins13A BRIEF HISTORYa. Price-specie-flow mechanismadjustments were automatic:1.)When a ba

8、lance of payments surplus led to a gold inflow;2.)Gold inflow led to higher prices which reduced surplus;3.)Gold outflow led to lower prices and increased surplus.14A BRIEF HISTORYIII.The Gold Exchange Standard (1925-1931)A.Only U.S. and Britain allowedto hold gold reserves.B.Others could hold both

9、gold, dollars or pound reserves.15A BRIEF HISTORYC.Currencies devalued in 1931- led to trade wars.D.Bretton Woods Conference- called in order to avoid future protectionist and destructive economic policies16A BRIEF HISTORYV. The Bretton Woods System (1946-1971)1.U.S.$ was key currency;valued at $1 -

10、 1/35 oz. of gold.2.All currencies linked to that price in a fixed rate system.17A BRIEF HISTORY3.Exchange rates allowed to fluctuate by 1% above or below initially set rates.B. Collapse, 19711.Causes:a.U.S. high inflation rate b.U.S.$ depreciated sharply.18A BRIEF HISTORYV. Post-Bretton Woods Syste

11、m (1971-Present)A.Smithsonian Agreement, 1971:US$ devalued to 1/38 oz. of gold.By 1973: World on a freely floating exchange rate system.19A BRIEF HISTORYB. OPEC and the Oil Crisis (1973-774)1. OPEC raised oil prices four fold;2. Exchange rate turmoil resulted;3. Caused OPEC nations to earn large sur

12、plus B-O-P.20A BRIEF HISTORY4. Surpluses recycled to debtor nations which set up debt crisis of 1980s.C.Dollar Crisis (1977-78)1.U.S. B-O-P difficulties2.Result of inconsistent monetary policy in U.S.21A BRIEF HISTORY3.Dollar value falls as confidence shrinks.D.The Rising Dollar (1980-85)1.U.S. infl

13、ation subsides as theFed raises interest rates2.Rising rates attracts global capital to U.S.22A BRIEF HISTORY3.Result: Dollar value rises.E.The Sinking Dollar:(1985-87)1.Dollar revaluated slowly downward;2.Plaza Agreement (1985)G-5 agree to depress US$further.23A BRIEF HISTORY3.Louvre Agreement (198

14、7)G-7 agree to support the falling US$.F.Recent History (1988-Present)1.1988 US$ stabilized2.Post-1991 Confidence resulted in stronger dollar3.1993-1995 Dollar value falls24PART III.THE EUROPEAN MONETARY SYSTEMI.INTRODUCTIONA. The European Monetary System (EMS)1.A target-zone method (1979)2.Close ma

15、croeconomic policy coordination required. 25THE EUROPEAN MONETARY SYSTEMB. EMS Objective:to provide exchange rate stability to all members by holding exchange rates within specified limits.26THE EUROPEAN MONETARY SYSTEMC.European Currency Unit (ECU)a “cocktail” of European currencies with specified

16、weights as the unit of account.27THE EUROPEAN MONETARY SYSTEM1. Exchange rate mechanism (ERM) - each member determines mutually agreed upon central cross rate for its currency.28THE EUROPEAN MONETARY SYSTEM2.Member Pledge:to keep within 15% margin above or below the central rate.29THE EUROPEAN MONET

17、ARY SYSTEMD.EMS ups and downs1. Foreign exchange interventions: failed due to lack of support by coordinated monetary policies.30THE EUROPEAN MONETARY SYSTEM2. Currency Crisis of Sept. 1992a. System broke downb.Britain and Italy forced towithdraw from EMS.31THE EUROPEAN MONETARY SYSTEMG.Failure of t

18、he EMS:members allowed political priorities to dominate exchange rate policies.32THE EUROPEAN MONETARY SYSTEMH.Maastricht Treaty1.Called for Monetary Union by 1999 (moved to 2002)2.Established a single currency:the euro33THE EUROPEAN MONETARY SYSTEM3.Calls for creation of a singlecentral EU bank4.Adopts tough fiscal standards34THE EUROPEAN MONETARY SYSTEMI.Costs / Benefits of A Single CurrencyA. Benefits1.Reduces