"The problem is that the price of these 'puts' is a function of the currency's volatility, so with Bitcoin they would be very expensive".
Because of that limited staff, the E.C.B. depends on the Bundesbank to handle many of the back-office functions of the common currency.
As a result, it will be best for a company to charge a combined-currency price for, say, an airline ticket when two conditions exist: The consumer does not value each unit within a currency equally and the perceived cost function for one of the currencies is said to be "convex".
The following paragraph was added to Article 136 of the Treaty of the Functioning of the European Union: "The member states whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole.
"Paper currency has become a major impediment to the smooth functioning of the global financial system," he writes.
(In the political economy of the day, a nation's strength was a direct function of its hard currency reserves, and the reserves of the Bank of England had fallen to ominously low levels).
(The answer, as in 1890 when Barings collapsed was to borrow money from friendly foreign central banks).As the monetary system evolved, the currency guarantor function of the central banks changed with it.
This showed the government's resolve to keep inflation in check.Next, in order to "de-index" the economy, most contracts were converted to "units of real value" (URVs), make-believe money that served only as a unit of accounts, not a means of exchange or store of value, the other two functions of currency.
