Common Critiques

“When put into effect, currency boards have ALWAYS worked” - Steve Forbes

• “No lender of last resort is dangerous.” Empirical evidence shows banking systems under currency boards are more stable, not less, because banks cannot rely on bailouts.
• “Currency boards limit growth.” Data contradicts this: stabilization and credibility boost investment and growth.
• “They are too rigid.” The rigidity is the feature — not a bug — and is precisely why they work.
• “Argentina’s Currency Board Failed” Argentina failed to follow orthodox rules on currency boards and therefore came under a speculative crisis. Had they had a true currency board their system would be alive and successful today.