European exchange rate mechanism

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European exchange rate mechanism (ERM)

The system that countries in the European Union once used to pay exchange rates within bands around an ERM central value.
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References in periodicals archive ?
Various market events covered by Fung and Hsieh [46] include October 1987 stock market crash, 1992 European Rate Mechanism crisis, 1993 European bond market rally, 1994 European bond market turbulence, 1994-1995 Mexican crisis, and 1997 Asian Currency crisis.
While most industrial countries have few restrictions, in times of crisis such as the one experienced by the European Rate Mechanism (ERM) last year, temporary illiquidity and official restrictions can occur in the exchange markets, causing difficulty in effecting payments and entering into foreign exchange hedge contracts.

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