European Monetary System


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European Monetary System

n
(Banking & Finance) the system used in the European Union for stabilizing exchange rates between the currencies of member states and financing the balance-of-payments support mechanism. The original Exchange Rate Mechanism was formed in 1979 but superseded in 1999 when the euro was adopted as official currency of 11 EU member states. A new exchange rate mechanism (ERM II) based on the euro is used to regulate the currencies of participating states that have not adopted the euro. Abbreviation: EMS

European Monetary System

A financial system used to stabilize exchange rates between currencies of member states.
References in periodicals archive ?
The European Monetary System began as a high-level reaction to global currency chaos, and in particular to the depreciation of the dollar in 1977 and 1978, which seemed to threaten its continued role as the major international reserve currency.
8 Which former economics adviser to Margaret Thatcher, who once described the European Monetary System as half baked, died, aged 82?
It was 20 years after the European Monetary System was created in 1979 that the euro was introduced.
Any seeking a short history of the European monetary system and how it's being integrated today must have Madeleine O.
The ECU was conceived in 1979 by the European Economic Community, the predecessor of the European Union, as a unit of account for the currency area called the European Monetary System and was also the precursor of the euro, which was introduced in 1999.
He describes how the breakdown of the Bretton Woods system established after World War II to stabilize international monetary and financial systems led to demands for European monetary unification, and he explores the structure and modes of operation of the European Monetary System that existed from 1979 until the start of the EMU in 1999.
There is little doubt that Germany's role in the European Monetary System in the years leading up to European Monetary Union warrants reactions to interest rate developments abroad.
The European Monetary System (EMS) turbulence at the beginning of the 1990s, or the recent experience of Hungary, supports this argument.
Seven years later, in 1992, in the middle of the ERM crisis of the European Monetary System, the dollar had fallen below DM1.
1979 - The European Monetary System (EMS) is created, with the exchange rate mechanism (ERM) defining rates in relation to the European Currency Unit (ECU).

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