Does Central Bank Intervention Influence the Probability of a Speculative Attack? Evidence from the EMS
AbstractThis paper studies the effects of central bank intervention during the 1992- 1993 EMS crises on the D-mark/peseta and D-mark/French franc exchange rate. In particular, it is analyzed how interventions affected the probability of a speculative attack and market participants’ expectations about realignments. The findings provide evidence that interventions seem to have increased both the expected realignment rate and the probability of a speculative attack. Furthermore, there is some evidence that this effect arises for publicly known but not for secret interventions.
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Bibliographic InfoPaper provided by Oesterreichische Nationalbank (Austrian Central Bank) in its series Working Papers with number 80.
Date of creation: 04 Nov 2002
Date of revision:
Postal: Oesterreichische Nationalbank, Economic Studies Division, c/o Beate Hofbauer-Berlakovich, POB 61, A-1011 Vienna, Austria
Find related papers by JEL classification:
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-27 (All new papers)
- NEP-EEC-2003-04-27 (European Economics)
- NEP-IFN-2003-04-27 (International Finance)
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- Grech, Harald & Stix, Helmut & Brandner, Peter, 2001.
"The Effectiveness of Central Bank Intervention in the EMS: The Post 1993 Experience,"
55, Oesterreichische Nationalbank (Austrian Central Bank).
- Brandner, Peter & Grech, Harald & Stix, Helmut, 2006. "The effectiveness of central bank intervention in the EMS: The post 1993 experience," Journal of International Money and Finance, Elsevier, vol. 25(4), pages 580-597, June.
- Peter Brandner & Harald Grech & Helmut Stix, 2001. "The Effectiveness of Central Bank Intervention in the EMS. The Post 1993 Experience," WIFO Working Papers 168, WIFO.
- Ales Bulir, 2004.
"Liberalized Markets Have More Stable Exchange Rates: Short-Run Evidence from Four Transition Countries,"
IMF Working Papers
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