The Consortium and its Interbank Office: A Currency to be ‘Sold’

Jacques Riboud

Chapter 2 in A Stable External Currency for Europe, 1991, pp 33-40 from Palgrave Macmillan

Abstract: Abstract The territory within which the new currency will circulate has been defined: it is the vast area, virtual or real, that is to be found between states. This area has no currency of its own, nor has it a central bank. Within this same area there is also the Euromarket. Virgin territory of this kind offers exceptional opportunities. The aim now is to imagine the kind of banking and monetary organisation that must be created for this new market so as to be able to put them to use in optimum conditions. The system proposed in these pages was inspired by the national systems to be found in all countries, the value of which has been proved by experience. What characterises these systems is the combination of a body (the central bank) which is under the explicit or implicit control of the government and a group of commercial banks. In order for this system to work, there is an instrument: the central bank money issued by the central bank in the form of claims on itself. This system makes it possible for the banks that are located within a national territory (13 500 in the United States) to create payment money in claims on themselves and to put it into circulation among the public, whilst at the same time remaining within the limits of a minimum of solidarity and discipline.

Keywords: Central Bank; Banking System; Foreign Currency; Central Office; Payment Instrument (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11821-2_3

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DOI: 10.1007/978-1-349-11821-2_3

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