The European Monetary Cooperation Fund (EMCF) was a fund established in April 1973 by members of the
European Economic Community
The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lis ...
(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 (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 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 centra ...
.
References
Bodies of the European Union
Monetary policy of the European Union
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