THEEUROPEANCURRENCYCRISIS---1992-1993.pptVIP

THE EUROPEAN CURRENCY CRISIS---1992-1993 Presented by: Renee Wang Xintian Wu Yu-fa Chou INTRODUCTION War in Europe: late September, 1992 Central Banks vs Investors Sell: Deutsche Mark Sell: British Pound Buy: British Pound Italian Lira Italian Lira Buy: Deutsche Mark Aim: To maintain/destroy the exchange rates between Mark/Pound and Mark/Lira Result: Pound and Lira were forced to be withdrawn from ERM European Exchange Rate Mechanism HISTORY BACKGROUND What is EMS? Most members of the European Economic Community EEC linked their currencies to prevent large fluctuations relative to anothe