The resultant trilemma pointed in three possible directions: one was to attempt to control international capital flows, a solution that for good reasons was rejected by most countries 1 ; the second was to move to a more flexible exchange rate – though not necessarily one that was totally free-floating; and the third was to strengthen the exchange rate peg, either by adopting a currency board, or by getting rid of the exchange rate entirely, that is by adopting a foreign currency, or full dollarization.
The major benefit of the third solution as seen at the time – and as emphasized particularly by my then-colleague Michael Deppler of the IMF – was that a country that adopted that solution would  1  Among these reasons is that capital controls tend to: cut the development of the financial sector of the country off from the global economy; cut the economy off from the benefits of international trade in assets; and are frequently ineffective and a source of corruption.