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Outsourcing Central Banking: Lessons from Estonia
Currency board foreign banks outsourcing regional integration supervision
2011/9/27
An orthodox currency board (CB) renders central banking redundant for interest and exchange rate determination. Thereby, monetary policy is de facto outsourced. Foreign direct investment (FDI) in bank...
AbstractThis paper provides an explanation for outsourcing based on uncertainty. We study an optimal capital investment model both with and without the possibility to outsource under uncertainty. We s...