The real stabilization plan and the banking sector in Brazil

Article Abstract:

The performance of the Brazilian banking industry after price stabilization and threat of a systemic crisis has been evaluated. A theoretical approach to banking crisis as a possible result of credit expansion has been developed. The results indicate that problems encountered by the Brazilian banking industry in 1995 were bank-specific and did not constitute a bank crisis. Banks which were over-extended or have unsound credit facilities were denied funds in the interbank credit markets. However, financially sound banks were able to make the transition to price stability conditions, partly due to a successful government support program.

Administration of General Economic Programs, Financial Services, Finance and Insurance, Currency Stabilization Programs, Banking industry, Currency stabilization, Real (Brazil)

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Setting conversion rates for the third stage of EMU

Article Abstract:

Constraints on the choices in setting the conversion rates for the third stage of European Monetary Union are less stiff if euro conversion rates are set after establishing the bilateral rates. This may be done by announcing the use of ecu market rates on the last market day of 1998 and agreeing on the bilateral rates before Jan 1, 1999. Country leaders, however, should work to push market rates to the agreed level to produce a one-to-one euro-ecu relation that is compatible to the bilateral parities.

Exchange Rates, Economic policy, Euro (Currency), European Monetary System

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