Both countries pursued a policy classified as fixed, but adjustable exchange rates. There were some differences as well. From a formal viewpoint the anchors were different. Iceland pegged a basket of currencies roughly reflecting the composition of the effective exchange rate, while Denmark in the whole period from the breakdown of the Bretton Woods-system in 1971/73 has participated in the various European exchange-rate arrangements.
It was of greater significance, however, how the weights to each of the words “fixed” and “adjustable” developed in the two countries. The main theme of this article is why and how Denmark increasingly gave importance to the word “fixed” and how the present institutions work.