Wednesday, April 11, 2012

If the Fed pegged to the loonie

Nick Rowe had an interesting post here. He asks how the Bank of Montreal would be different from the Federal Reserve if the Fed decided to peg it's currency to the Canadian dollar. I think the difference would be that BMO has access to Canadian Payments Association's LVTS (Canada's monopoly payments clearinghouse) and LOLR services provided by the Bank of Canada, whereas the Fed would have neither benefit.

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