This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in...

This paper provides an analytic overview of independent currency authorities (ICAs), sometimes called currency boards. ICAs issue and redeem domestic currency against an exchange standard on demand and back such operations through a 100 percent marginal foreign reserve cover. They also impose...

This paper analyzes the quasi-fiscal effects of Italy’s relatively high bank reserve requirements, against the background of growing pressure to align them with those of other EC countries. The paper develops an integrated accounting framework for the measurement of implicit and explicit taxes...