From the WSJ's The Euro Crisis blog:
If, over the weekend, euro-zone countries reverted to their national currencies, how would they move relative to each other?
- A drachma coin is seen on display.
We’ll assume they swap one for one. In other words one new old currency for one euro.
So what happens now?
Well, it’s a pretty simple assumption that the Deutschmark would appreciate while the drachma would drop like a stone. But by how much?
One rough and ready proxy could be the euro-zone central banks’ Target2 balances. Target2 balances are how national central banks within the single currency reconcile cross-border commercial banking payments....MORE
