Enumerate the working of coordination mechanism, Business Law and Ethics

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Enumerate the Working of coordination mechanism

Take interesting case which will clarify the working of coordination mechanism better. If a member State in EMU, defaults on its public debt it will lead to capital impairment amongst its creditors, not least the commercial banking system. The risk that this banking crisis will spread to the rest of the Euro area would place the European Central Bank under intense pressure and it will come forward to bail out the defaulty member State, even if this destabilises Euro Area prices and in doing so, the central bank will ultimately lose credibility.

 


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