The prevalent explanation of the Exchange Rate Mechanism (ERM) currency crisis of September, 1992 is that myopic speculation prevailed over the “fundamentals.†Our paper explores the reasons why the Italian lira and the U.K. pound were attacked and, subsequently, forced out of the ERM....

The monetary Authority of Singapore (MAS) has a policy of controlling bank lending in Singapore dollars to non-residents and residents outside Singapore. One of the objectives of this MAS policy is to discourage speculation against the Singapore dollar in times of currency crisis. The present...