--%>
Assignment Help - homework help

European Monetary System

Discuss the workings and arrangements of European Monetary System (EMS).

E

Expert

Verified

EMS was launched in the year 1979 for:

a) Establish the zone of monetary stability in the Europe, 

b) Coordinate exchange rate policies against non-EMS currencies, and 

c) Pave the way for eventual European monetary union. 

Main instruments of EMS are and Exchange Rate Mechanism (ERM) European Currency Unit (ECU). Just like SDR, ECU is also a basket currency formed as a weighted average of currencies of various EU member countries. ECU works as accounting unit of EMS and performs an important role during the working of ERM. ERM is the process through which member of the EMS countries manages their exchange rates. ERM is based on the parity grid system, along with parity grids firstly computed by defining the par values of EMS currencies in terms of ECU. In case, a country’s ECU market exchanges the rate diverges from central rate through as much as the utmost allowable deviation, country has to adjust its policies in order to maintain the par values relation to the other currencies.

   Related Questions in Financial Accounting

  • Q : Define the term Accounts Receivable

    Accounts Receivable: The money owed by customers (that is, individuals or corporations) to other entity in exchange for services or goods that have been employed or delivered, however not yet paid for. Receivables generally come in the form of operati

    		•
  • Q : Accountant & Financial In Business

    Questions 1. Identify the services or programs to be included in the cost and profitability analysis. 2. Examine the costs listed in Table 2. a. Identify the direct costs associated with each service or program. b. Which costs would be organization

    		•
  • Q : Define the term Equipment Define the

    Define the term Equipment in Accountancy? Why they are used?

    		•
  • Q : Concessionary loan with APV model State

    State nature of the concessionary loan and explain how it is handled within the APV model?

    		•
  • Q : Cost accountant With Black

    Black Manufacturing Company Black Manufacturing produced a single product called the Great Beast. During the past three weeks, Lee High, the new cost accountant, had observed that production efficiency and input pr

    		•
  • Q : Trading A CD/$ bank trader is presently

    A CD/$ bank trader is presently quoting a small figure bid-ask of 35-40, while rest of the market is trading at the CD1.3436-CD1.3441.  Specify what all is implied about trader’s beliefs by his prices?

    		•
  • Q : Capital budgeting analysis imperative

    State why is capital budgeting analysis so imperative for the firm?

    		•
  • Q : Monetary/nonmonetary and temporal method

    Discuss dissimilarity in translation process between monetary/nonmonetary and temporal method.

    		•
  • Q : Retail Invoice versus Tax Invoice

    Explain the difference between Retail Invoice vs. Tax Invoice?

    		•
  • Q : Investors investing within the lion’s

    Explain why do investors invest within the lion’s share of their funds within the domestic securities?

    		•