The Euro and International Capital Markets

Detken, Carsten; Hartmann, Philipp

doi:10.2139/ssrn.355561

Cited by 5 publications

(1 citation statement)

References 54 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: Table 2: Global Net Issuance Of Debt Securitiesmentioning

confidence: 99%

The European Bond Markets Under Emu

Pagano,

Thadden

2008

European Financial Markets and Institutions

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The European Monetary Union (EMU) has probably been the single most important policy-induced innovation in the international financial system since the collapse of the Bretton Woods system. It has opened the possibility for the creation of a new, fully integrated continental financial market, of the same scale as that of the United States. By eliminating exchange rate risk, EMU has eliminated a key obstacle to financial integration.

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Section: Table 2: Global Net Issuance Of Debt Securitiesmentioning

confidence: 99%

The European Bond Markets Under Emu

Pagano,

Thadden

2008

European Financial Markets and Institutions

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The impact of the euro on Europe's financial markets

Galati¹,

Tsatsaronis²

2003

Financial Market

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This paper presents an overview of the impact of the introduction of the euro on Europe's financial structure over the first four years since the start of EMU. It analyzes changes in money markets, bond markets, equity markets and foreign exchange markets. Euro's role in originating or catalyzing trends has been uneven across the spectrum of financial markets. From the supply side, banks and investors in fixed income markets have become more focused on the characteristics of individual borrowers rather than the nationality of the issuer and have built up expertise to evaluate credit risk. European equity markets have also been affected by the enhanced ability of investors to build strategies with a pan‐European perspective as prices increasingly reflected risk factors specific to industrial sectors rather than individual countries. On the borrower side, EMU has increased the attractiveness of market‐based financing methods by allowing debt issuers to tap institutional portfolios across the euro area. Lower barriers to cross‐border financial transactions have also increased the contestability of the market for financial services, be it at the wholesale or the retail level. The introduction of the euro has also highlighted the shortcomings of existing institutional structures and areas where excessive focus on narrowly defined interests may stand in the way of realizing the full potential benefits from the new environment. Diverging legal and institutional infrastructures and market practices can impede further financial market development and deepening. Hence, the euro has put a premium on cooperation between national authorities and institution as a means of achieving a more harmonized financial environment. The impact of EMU on depth in foreign exchange markets has been less clear‐cut, as volatility, spreads, trading volumes and liquidity appear not to have changed in a substantial way. Overall, it seems that the new currency has made some progress towards the goal of becoming a currency of international stature that would rival that of the US dollar. However, a number of the necessary next steps towards achieving this goal are also among the trickiest to implement.

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When Did the Dollar Overtake Sterling as the Leading International Currency? Evidence From the Bond Markets

2012

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This paper offers new evidence on the emergence of the dollar as the leading international currency, focusing on its role as currency of denomination in global bond markets. We show that the dollar overtook sterling much earlier than commonly supposed, as early as in 1929. Financial market development appears to have been the main factor helping the dollar to surmount sterling's head start. The finding that a shift from a unipolar to a multipolar international monetary and financial system has happened before suggests that it can happen again. That the shift occurred earlier than commonly believed suggests that the advantages of incumbency are not all they are cracked up to be. And that financial deepening was a key determinant of the dollar's emergence points to the challenges facing currencies aspiring to international status.

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The Euro and International Capital Markets

Cited by 5 publications

References 54 publications

The European Bond Markets Under Emu

The European Bond Markets Under Emu

The impact of the euro on Europe's financial markets

When Did the Dollar Overtake Sterling as the Leading International Currency? Evidence From the Bond Markets

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