Diane
May 25, 2002 New model for common currency Jacqueline Thorpe Financial Post
Economist suggests central banks operate separately, with shared inflation goals...
"The central bank policy interest rate would be the same in all three countries; changes would be announced simultaneously by all three central banks," Mr. Carmichael said.
Bank notes in the three countries could vary but they would be of equal value. For example, the existing U.S. dollar would continue to circulate in the United States while Canadian and Mexican versions of the dollar -- depicting Canadian prime ministers and Mexican presidents on one side -- would circulate primarily within Canada and Mexico. Any one of the three versions of the dollar would be legal tender in all three countries.
This approach provides a share of "seigniorage" revenue (revenue governments gain by issuing currency -- about 0.3% of GDP in Canada) and still gives the central banks lender-of-last-resort responsibilities -- requiring them to provide liquidity during financial crises. http://www.nationalpost.com/financialpost/story.html?f=/stories/20020525/337604.html