Financial Dollarization

ADRI N ARMAS is Head of the Economic Studies Department of the Central Bank of Peru, where he has spent his entire career. Previously he occupied the position of Head of the Monetary Policy Division. He participated in the design and implementation of Peru's inflation targeting scheme and has written articles on this subject for the IMF, ECB and BIS. ALAIN IZE has worked at the IMF since 1985, first in the Fiscal Affairs Department, and since 1992 in the Monetary and Financial Systems Department. Previous to joining the Fund, he was a Professor in the Economics Department of El Colegio

'The contributions are generally of a high quality; the editors have done an excellent job, and the publication comes at an appropriate time.' - Bishnodat Persaud, Development and Policy Review

• Preface; O.Dancourt & S.Ingves Introduction; A.Armas, A.Ize & E.Levy-Yeyati PART I: FINANCIAL DOLLARIZATION: ROOTS AND DYNAMICS Financial Dollarization Equalibria: A Framework for Policy Analysis; A.Ize Comments on Chapter 2; O.Jeanne Financial De-dollarization: Is it for Real? A.Ize & E.Levy-Yeyati Comments on Chapter 3; R.Chang Financial Dollarization in Latin America; R.Rennhack & M.Nozaki Comments on Chapter 4; K.Cowan PART II: MONETARY AND EXCHANGE RATE MANAGEMENT Exchange Rate and Monetary Management in a Partially Dollarized Economy; L.Leiderman, R.Maino & E.Parrado Targeting Inflation in a Dollarized Economy: The Peruvian Experience; A.Armas & F.Grippa Discussants; K.Schmidt-Hebbel PART III: PRUDENTIAL MANAGEMENT Controlling Currency Mismatches in Emerging Economies; P.Turner Prudential Management in a Partially Dollarized Economy: Toward Internationally Accepted Best Practices; J.Cayazzo, A.I.G.Pascual, E.Gutierrez & S.Heysen Managing Systematic Liquidity Risk in a Dollarized Economy; A.Ize, M.Kiguel & E.Levy-Yeyati To Hell and Back: Crisis Management in a Dollarized Economy: The Case of Uruguay; J.de Brun & G.Licandro Discussant; P.Turner PART IV: PROMOTING THE LOCAL CURRENCY Can Indexed Debt Absolve Original Sin? Going Indexed or is Self-Flagellation Needed? A.Holland & C.Mulder De-dollarizing: The Gentle Way or the Hard Way? D.C.Hardy & C.Pazarbasioglu Discussants; A.de La Torre, L.Oscar Herrera & C.Irigoyen PART V: THE ROUTE AHEAD Summary of Round Table Discussion; A.Carstens, F.de Paula Gutierrez, L.Leiderman, J.A.Morales, M.Rodlauer & R.Rossini