Nations with credible monetary regimes borrow at lower interest rates in international markets and are less likely to suffer speculative attacks and currency crises. While scholars typically attribute credibility to domestic institutions or international agreements, Jana Grittersova argues that when reputable multinational banks headquartered in Western Europe or North America open branches and subsidiaries within a nation, they enhance that nation's monetary credibility. These banks enhance credibility by promoting financial transparency in the local system, improving the quality of...
Nations with credible monetary regimes borrow at lower interest rates in international markets and are less likely to suffer speculative attacks and c...