Euroisation. Assessing the Loss of Seigniorage and the Impact on the Interest Premium in Central European Countries
The loss of seigniorage and possible reductions in interest premiums are regarded as the most direct financial consequences of euroisation. The measurement of seigniorage depends on the chosen concept which in this study concentrates on the net revenues actually distributed to the fiscal authorities. Possible reductions in interest premiums are calculated by assuming that part of the default risk is due to the risk of default in case of a currency crisis. It is concluded that losses on seigniorage, but also potential benefits on the reduction of interest rates, are rather low for a group of more advanced eu accession countries in Central Europe and that they should not be important criteria for their governments considering euroisation.
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- Eduard Hochreiter & Riccardo Rovelli, 2002. "The generation and distribution of central bank seigniorage in the Czech Republic, Hungary and Poland," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 55(223), pages 391-415.
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