Onecanadasquare 36th floor, First Capital Investment Company.

The comprehensive conference room with more than 100 square feet, the smooth marble floor is spotless, and the white suspended ceiling is the most expensive Dajin central air conditioner in the world.

On the wall of the central area of ​​the office, there are projectors of the litepro series hanging, and rows of words are clearly displayed on the fluorescent screen.

erm, EC exchange rate mechanism.

According to the European monetary system, the currencies of Western European countries no longer stare at gold or US dollars, but are staring at each other; each currency is only allowed to float within a certain exchange rate range. Once the specified exchange rate floating range is exceeded, the central banks of each member state have the responsibility to intervene in market by buying and selling their own currencies to stabilize the exchange rate of the country's currency to the specified range;

Within the specified exchange rate floating range, the currencies of member states can float relative to the currencies of other member states, and the exchange rates between currencies of each member state are centered on the German mark.

Next to the ten-meter-long oval conference table, Shen Jiannan, Robert, John, as well as William and Andy Smith and Yu Zheng, the core members of the London of First Capital, sat quietly on the chair, facing the projector panel.

William's secretary Mary Snor Hunter was wearing a well-fitted suit and holding a teaching stick to tell the basic concepts of supplementing the European Community's exchange rate mechanism.

"The exchange rate of the currency of the member states sets a fixed central exchange rate, allowing the exchange rate to fluctuate within a certain range above and below the central exchange rate.

The purpose is to alleviate currency fluctuations in Europe so that companies do not have to worry about severe exchange rate fluctuations that will fail their business models when investing and trading.

For more than a decade, the mechanism has been working well, stabilizing the currency without extreme unifying the currency.

All the added currencies allow exchange rates to fluctuate on a small scale, and if there is insufficient flexibility, a country can negotiate depreciation with its European partners. These rules provide some governments with the possibility of using interest rates to manage economic cycles, a system that balances the goals of exchange rate stability and interest rate flexibility.”

“…”

Of course, William's secretary would not be ugly. Mary, who was just twenty-two years old, was young and beautiful. Her delicate facial features, beautiful curves and crisp voices made people feel very comfortable both visually and hearing.

Her basic skills are also very solid. As a top student at the School of Economics at Cambridge University, it is not a piece of cake to talk about an exchange rate mechanism.

Soon, after Mary Snowle Hunter finished talking about the basic concept, he glanced at the current big boss.

Shen Jiannan nodded in recognition and turned around and asked the people sitting.

"What do you think about Erm?"

The few people present looked at each other, except for William probably knowing that he didn't understand what his boss meant for a while.

Shen Jiannan raised his eyebrows and took out the cigarette and started to light it without any cultivation.

The smoke flowed into the lungs along the breath, eroding in the body again and again. After wandering around for a while, this guy sprayed the second-hand smoke to everyone present without public morality.

"In this way, I'll say it in another way. What do you think of the flaws in the erm exchange rate system?"

All the guys present were wise.

He carefully savored Shen Jiannan's words and guessed the purpose of his meeting with everyone in the middle of the night.

Soon, someone spoke.

Andy Smith, a Swedish currency expert, has been affiliated with the Reddian Hedge Fund for the past decade.

Now, he is the investment manager of Capital One.

"From the perspective of the exchange rate mechanism, the biggest problem is the communication problem between member states, and the economic strength between countries is also a certain gap. The linkage mechanism will cause some deviations in exchange rate coordination."

"But this problem is not very big. Central banks have the responsibility to maintain this exchange rate coordination."

“……”

“……”

Shen Jiannan was quite satisfied with Andy Smith's reaction. If you can't even see such basic problems, you'd better raise a pig if you're a yearly salary of $300,000.

After taking a sip of cigarettes again, Shen Jiannan pressed the cigarette butt and said with a smile.

"What if central banks are unable to interfere in this exchange rate coordination?"

“…”

The pair of eyes, big eyes, were glaring at the smallest eyes, except for Robert John, and William and Andy Smith couldn't help but swallow.

Shen Jiannan laughed so terrible.

Both of them are smart people. As the head of London, William probably has speculated that Andy Smith, as a currency expert, also keenly felt something.

"Ok. I think you already know my purpose. At present, the merger of Germany has caused a huge loophole in this system. With Mark's current strength, the pound and lira are facing great depreciation pressure. Now, let's analyze how we can make a lot of money using this loophole."

Gudong!

Gudong!

People are most afraid of association.

Thinking of the actions Shen Jiannan had always asked him to perform, William and Andy Smith swallowed together.

"Boss. Do you want to sell the UK?"

Bang!

Shen Jiannan snapped his fingers and gave Andy Smith a thumbs up. He could guess his purpose so quickly. The title of currency expert is not considered a leucorrhea.

In the late 1970s, affected by the oil crisis, the British economy fell from the world's factories to the peat swamp. As Mrs. Thatcher took office to promote privatization, the British economy temporarily escaped from the sluggish crisis.

However, the decline came just after the decline. Due to the privatization reform process, a large number of state-owned assets were sold to capital of other countries at a low price, and the market also moved from the British mainland to the European and North American markets. However, the US financial crisis broke out and the economy was once sluggish. With the recession of the North American market, the UK's export industry was severely restricted, causing a large number of ordinary people to lose their jobs.

According to the latest statistical report of the UK's National Office for Statistics, the GDP growth rate in the third quarter of 1991 worsened from zero growth in the second quarter, at negative 0.5%, the largest decline since 1990. The report shows that the GDP growth rate in the third quarter of the previous year was 0.3%, a 16-year low.

Data shows that in the first three quarters of this year, the UK's industrial production fell by 0.72 month-on-month, among which the weak trend in manufacturing was the most obvious, down by 1.0 quarter-on-month. At the same time, industrial investment also fell by 5.41%, the largest drop in 23 years. Not only that, the output of the service industry, which accounts for 2/3 of the UK's GDP, fell by 0.4% in the third quarter.

The European exchange rate mechanism was formulated by the European Economic Community in 1979, limiting the exchange rate fluctuation range of eleven European currencies. The original intention was to maintain the exchange rate stability between currencies of various countries. However, this exchange rate mechanism has a fatal weakness: countries must coordinate with each other's economic policies to keep fundamentals close before they can be maintained.

If the inflation rate in the UK is higher than that in Germany, it will put pressure on the exchange rate mechanism, and the interest rate spread between the two countries will also impact the exchange rate mechanism.

So the question is, with the development of the Internet, the scale of foreign exchange market transactions has reached astronomical literacy. In the past, the central bank's ability to interfere in its own currency with tens of billions of dollars in foreign exchange reserves has been greatly weakened.

He looked at Andy Smith and Shen Jiannan spoke with interest.

"Congratulations, you answered correctly."

"But the boss, that's the Bank of England."

Bank of England?

So what?
Chapter completed!