The Euro and International Capital Markets

Detken, Carsten; Hartmann, Philipp

doi:10.1111/1468-2362.00042

Cited by 56 publications

(33 citation statements)

References 55 publications

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“…International issues according to the BIS include all issues except the domestic-currency bonds issued by residents and targeted to domestic investors. However, Detken and Hartmann (2000) have rightly pointed out that these numbers understate the international use of the dollar, because of the global importance of the US market. They present data on announced debt issues that take this bias into account and find that the dollar has remained the most important international issuing currency, although the Euro has doubled its share in international debt issues between 1994 and 2003.…”

Section: The European Market In Global Perspectivementioning

confidence: 99%

The European Bond Markets under EMU

Pagano

Thadden

2004

Oxford Review of Economic Policy

210

136

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In this paper, we document how in the wake of monetary unification the markets for Euro-area sovereign and private-sector bonds have become increasingly integrated. Issuers and investors alike have come to regard the Euro-area bond market as a single one. Primary and secondary bond markets have become increasingly integrated on a pan-European scale. Issuance of corporate bonds has taken off on an unprecedented scale in continental Europe. In the process, both investors and issuers have reaped the considerable benefits afforded by greater competition in the underwriting of private bonds and auctioning of public ones, and by the greater liquidity of secondary markets. Bond yields have converged dramatically in the transition to EMU. The persistence of small and variable yield differentials for sovereign debt under EMU indicates that Euro-area bonds are still not perfect substitutes. However, to a large extent this does not reflect persistent market segmentation but rather small differentials in fundamental risk. Liquidity differences play at most a minor role, and this role appears to arise partly from their interaction with fundamental risk. The challenges still lying ahead are numerous. They include the unbalance between the German-dominated futures and the underlying cash market; the vulnerability of the cash markets' prices to free-riding and manipulation by large financial institutions; the possibility of joint bond issuance by Euro-area countries; the integration of clearing and settlement systems in the Euro-area bond market, and the participation of new accession countries' issuers to this market. JEL classification numbers: G15, G32.

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Section: The European Market In Global Perspectivementioning

confidence: 99%

The European Bond Markets under EMU

Pagano

Thadden

2004

Oxford Review of Economic Policy

210

136

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“…The USD is by far the most liquid currency, especially for spot transactions. 5 Detken and Hartman (2000) discuss the various features involving the international role of currencies (financing and investment roles), with a special emphasis on the changes associated with the inception of the Euro. They document the leading position of the USD in all segments, especially during the period before 1999 in which the Fed and the Bundesbank were active on the markets.…”

Section: Contribution Of the Papermentioning

confidence: 99%

The Impact of Central Bank FX Interventions on Currency Components

2005

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This paper is the first attempt to assess the impact of official FOREX interventions of the three major central banks in terms of the dynamics of the currency components of the major exchange rates (EUR/USD and YEN/USD) over the period [1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001][2002][2003]. We identify the currency components of the mean and the volatility processes of exchange rates using the recent Bayesian framework developed by Bos and Shephard (2004). Our results show that in general, the concerted interventions tend to affect the dynamics of both currency components of the exchange rate. In contrast, unilateral interventions are found to primarily affect the currency of the central bank present in the market. Our findings also emphasize a role for interventions conducted by these central banks on other related FOREX markets.

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“…In addition, the private use of money can be distinguished from its official use. Source: Hartmann (1998) and Detken and Hartmann (2000).…”

Section: Functions Of An International Currencymentioning

confidence: 99%