Guide to Analysing Companies

European Monetary Institute
The forerunner of the european central bank (ecb) made
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EUROPEAN MONETARY INSTITUTE
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necessary by economic and monetary union and the
single European currency. The European Monetary Institute
(emi) was established in 1994 and based in Frankfurt. Its aim
was to strengthen the co-ordination of monetary affairs
between European Union member states and to set up the in-
frastructure necessary for the proper functioning of European
monetary policy and a single European currency. The emi was
superseded by the ecb in June 1998.
European Monetary System
A scheme to manage the way in which European currencies’ ex-
change rates move against each other. The European Monetary
System (ems) started on March 13th 1979 as the successor to the
snake, the first concerted attempt to dampen fluctuations in ex-
change rates since the dollar had been allowed to float freely in
1971. The Maastricht treaty (signed in 1992) laid out plans to take
the ems several giant steps further. It provided a schedule to im-
plement economic and monetary union through a
system of permanently interlocked exchange rates and a single
monetary policy. It led ultimately to the adoption of the Euro-
pean currency, the euro.
European-style option
An option that can only be exercised on the date that it
expires; the opposite of an american-style option, which
can be exercised at any time between the date it is purchased
and its expiry. Most options in the United States are American-
style, but Europe deals in both. For obvious reasons, American-
style options are more flexible.
Exchange control
The method by which governments attempt to control the flow
of currency in and out of their country, both foreign currencies