The European Monetary Cooperation Fund (EMCF) was a fund established in April 1973 by members of the
European Economic Community (EEC) to ensure concerted action for a proper functioning of the Community exchange system.
The EMCF was located in Luxembourg. The decision-making body, the Board of Governors, was composed of the governors from the EEC countries' central banks.
In contrast to what its name indicates, the fund did not hold any paid-in capital.
The concerted action tasks attributed to the fund were:
* the progressive narrowing of the margins of fluctuation of the Community currencies against each other;
* interventions in Community currencies on the exchange markets;
* settlements between Central Banks leading to a concerted policy on reserves.
This exchange rate system, also called 'the snake', followed the
Snake in the tunnel
The snake in the tunnel was a system of European monetary cooperation in the 1970s which aimed at limiting fluctuations between different European currencies. It was the first attempt at European monetary cooperation. It attempted to create a sing ...
after Nixon's decision to let the dollar float freely. In 1979 the
European Monetary System
The European Monetary System (EMS) was a multilateral adjustable exchange rate agreement in which most of the nations of the European Economic Community (EEC) linked their currencies to prevent large fluctuations in relative value. It was initiate ...
(EMS) was established and replaced 'the snake' and the EMCF took charge of the same tasks within the European Monetary Systems'
European Exchange Rate Mechanism (ERM).
It was dissolved in January 1994 and succeeded by the
European Monetary Institute
The European Monetary Institute (EMI) was the forerunner of the European Central Bank (ECB), operating between 1994 and 1997.
History
The EMI was created 1 January 1994 to oversee the second stage in the creation of monetary union. The EMI itself ...
which was later replaced by the
European Central Bank
The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's most important centr ...
.
References
Bodies of the European Union
Monetary policy of the European Union
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