<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>Currency Board Arrangements (CBAs) operate in several post-socialist European economies as an alternative to traditional central banking. The CBA literature primarily focuses on the discipline of the fixed exchange rate, suggesting that the gain of reduced exchange rate volatility and monetary stability outweigh the loss of independent monetary policy. It does not address the role and impact of foreign ownership of the banking system on currency board dynamics. Through a case study of the CBA in Bosnia and Herzegovina over a ten-year period, including the global financial crisis of 2008-09, this paper suggests that monetary policy is not abandoned; it is decentralized and privatized and critical to the maintenance of financial stability of the CBA.</p></abstract>

Currency Board Arrangements (CBAs) operate in several post-socialist European economies as an alternative to traditional central banking. The CBA literature primarily focuses on the discipline of the fixed exchange rate, suggesting that the gain of reduced exchange rate volatility and monetary stability outweigh the loss of independent monetary policy. It does not address the role and impact of foreign ownership of the banking system on currency board dynamics. Through a case study of the CBA in Bosnia and Herzegovina over a ten-year period, including the global financial crisis of 2008-09, this paper suggests that monetary policy is not abandoned; it is decentralized and privatized and critical to the maintenance of financial stability of the CBA.

The Political Economy of Currency Boards: Case of Bosnia and Herzegovina

Department of Economics, University of Vermont

South East European Journal of Economics and Business

{"article-title":"The Political Economy of Currency Boards: Case of Bosnia and Herzegovina"}

Currency Board Arrangements (CBAs) operate in several post-socialist European economies as an alternative to traditional central banking. The CBA literature...

The Political Economy of Currency Boards: Case of Bosnia and Herzegovina

Publié en ligne: 03 juin 2011

Pages: 7 - 20

DOI: https://doi.org/10.2478/v10033-010-0011-6

Mots clés
Currency Board, transition economies, Bosnia and Herzegovina, monetary policy, southeast Europe

This content is open access.

The Political Economy of Currency Boards: Case of Bosnia and Herzegovina

Publié en ligne: 03 juin 2011

Pages: 7 - 20

DOI: https://doi.org/10.2478/v10033-010-0011-6

Mots clésCurrency Board, transition economies, Bosnia and Herzegovina, monetary policy, southeast Europe

This content is open access.

Mots clés
Currency Board, transition economies, Bosnia and Herzegovina, monetary policy, southeast Europe