Journal of Business & Economic Policy

Currency Crisis as the Next Possible Effect of the Imbalance of Part of the World’s Economy in the 21st Century. Conclusions for Poland
Piotr Lis, Sławomir Zwierzchlewski

Abstract
According to the authors, a serious imbalance of part of the world’s economy in the 21st century, emphasized in the form of the financial crisis and the subsequent economic and debt crises, is a vital factor facilitating the occurrence of the currency crisis. The authors have identified four major groups of conditions for the emergence of currency crises, i.e. 1) real sphere factors, including company and household debts in foreign currencies, 2) functioning of the financial system, including the quality of supervisory and audit institutions, 3) economic policy, especially the public finance sector debt, the established exchange-rate regime and the level of currency reserves, 4) external factors, including an import of crisis from the neighboring states. An assessment of the above conditions for Poland makes it possible to estimate the risk of the occurrence of a currency crisis as low. The current exchange-rate regime, Institutions of Supervision and Security in Poland and the level of currency reserves have been concluded to serve as strong crisis-defense factors. The liberalization of capital flows and public finance sector debt have been assumed to be rather slumpogenic factors. The assessment of the risk of the occurrence of a currency crisis will become greater in the case of Poland’s participation in the ERM II mechanism which precedes Poland’s accession to the European Monetary Union. In this context, the exchangerate regime and the level of currency reserves have been regarded as rather slumpogenic factors.

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