Options for Modifying the International Monetary System. Phase 1. Research Project Conducted in the International Finance Section, Princeton, University

摘要

Research on U.S. options for modifying the international monetary system is described. The dollar is said to be the principal intervention currency for central banks and governments; however, participants in the exchange rate arrangements of the European Monetary System (EMS) must intervene directly in other EMS currencies when exchange rates reach the limits set by those arrangements. The dollar may be used for intramarginal intervention. It is found that the dollar is still used extensively in invoicing the exports of lesser developed countries, that bank lending in Eurocurrencies has grown less rapidly than lending in domestic currencies, and that the large and stable role of the dollar in the British segment of the market can be explained neither by the presence there of U.S. banks nor by the presence of the interbank market. Seven research memoranda upon which these conclusions are based are attached. An appendix reports on preliminary comparisons between optimum portfolios of U.S. commercial banks. Reviewer comments are appended to the report.