European Monetary Union And International Capital Markets

This paper analyzes the structural implications of EMU for international capital markets. It discusses the potential size of euro capital markets and the existing roles of European currencies in international capital markets. The paper also examines the euro’s impact on international securities markets, including the role of the ECB, the evolution of EMU securities markets, and aspects of systemic risk management. The implications for wholesale and retail banking markets are also discussed, as are the broader implications of the introduction of the euro for changes in international capital flows, international portfolios, and by implication exchange rates.

This book is based on the conference "EMU and the Outside World", held at the Swiss Federal Institute of Technology (ETH), December 11, 1998. The conference was organized by the Swiss Institute for Business Cycle Research (KOF), which is supported jointly by the ETH and the Swiss Society for Business Cycle Research (SGK), an organization comprising representatives from private industry, the Swiss National Bank and public authorities. On the eve of the final stage of European Economic and Mone tary Union (EMU), Zurich seemed to be a particularly appropriate place for such a conference. On the one hand, given its location and economic and financial links with the euro area, Switzerland is one of the "outside coun tries" most affected by EMU. On the other hand, it was nowhere else than in Zurich where the vision of "a United States of Europe" was expressed for the first time by Winston Churchill in his speech on September 19, 1946. For many EMU is a step in that direction, whether welcome or not. Most of the papers appearing in this volume were presented at the con ference and have been revised and updated. Three contributions, chapter 11- 13, were commissioned specially for this publication. Besides the authors of the chapters, special thanks are due to Guido Boller, Robert McCauley, Umberto Schwarz, and Charles Wyplosz.

Experts from economics, finance, law, policy, and banking discuss the design and implementation of a future capital market union in Europe. The plan for further development of Europe's economic and monetary union foresees the creation of a capital market union (CMU)—a single market for capital in the entire Eurozone. The need for citizens and firms of all European countries to have access to funding, together with the pressure to improve the efficiency and risk-sharing opportunities of the financial system in general, put the CMU among the top priorities on the Eurozone's agenda. In this volume, leading academics in economics, finance, and law, along with policy makers and practitioners, discuss the design and implementation of a future CMU. Contributors describe the key design challenges of the CMU; specific opportunities and obstacles for reaching the CMU's goals of increasing the economic well-being of households and the profitability and viability of firms; the role that markets—from the latest fintech developments to traditional equity markets—can play in the future success of CMU; and the institutional framework needed for CMU in the aftermath of the global recession. Contributors Sumit Agarwal, Franklin Allen, Valentina Allotti, Gene Amromin, John Armour, Geert Bekaert, Itzhak Ben-David, Marcello Bianchi, Lorenzo Bini-Smaghi, Claudio Borio, Franziska Bremus, Marina Brogi, Claudia M. Buch, Giacomo Calzolari, Souphala Chomsisengphet, Luca Enriques, Douglas D. Evanoff, Ester Faia, Eilis Ferran, Jeffrey N. Gordon, Michael Haliassos, Campbell R. Harvey, Kathryn Judge, Suzanne Kalss, Valentina Lagasio, Katya Langenbucher, Christian T. Lundblad, Massimo Marchesi, Alexander Michaelides, Stefano Micossi, Emanuel Moench, Mario Nava, Giorgio Barba Navaretti, Giovanna Nicodano, Gianmarco Ottaviano, Marco Pagano, Monica Paiella, Lubos Pastor, Alain Pietrancosta, Richard Portes, Alberto Franco Pozzolo, Stephan Siegel, Wolfe-Georg Ringe, Diego Valiante

Considers effects on capital and goods markets of monetary union in general and European Monetary Union (EMU) in particular. This volume addresses the effects of monetary union, which fall into three categories - adjustments in goods and labor markets, adjustments in money and capital markets, and institutional adjustments.

This book, edited by Paul R. Masson, Thomas Krueger, and Bart G. Turtelboom, contains the proceedings of the seminar held in Washington, D.C. on March 17-18, 1997, cosponsored by the IMF and Fondation Camille Gutt. Conference participants discussed implications of European Economic and Monetary Union (EMU) on exchange and financial markets, and consequently on the activities of market participants and private and official institutions. The five main themes of the seminar were the characteristics of the euro and its potential role as an international currency; EMU and international policy coordination; EMU and the relationship between the IMF and its EMU members; lessons of European monetary integration for the international monetary system; and the transitioin to EMU.

The papers collected in this volume are those presented at the thirteenth Colloquium arranged by the Societe Universitaire Europeenne de Recherches Financieres (SUERF), which took place in Luxembourg in October 1986. The Society issupported byalargenumberofcentralbanksandcommer cial banks, byother financial and business institutions, by treasury officials and by academics and others interested in monetary and financial prob lems. Since its establishment in 1963 it has developed as a forum for the exchange of information, research results and ideas, valued by academics and practitioners in these fields, including central bank officials and civil servants responsible for formulating and applying monetary and financial policies, national and international. A major 'activity of SUERF is to organize and conduct Colloquia on subjects of topical interest to its mem bers. The titles, places and dates of previous Colloquia for which volumes of the collected papers were published are noted on the last page of this volume. Volumes were not produced for Colloquia held at Tarragona, Spain in October 1970 under the title 'Monetary Policy and New Develop ments inBanking'andatStrasbourg, France inJanuary 1972underthe title 'Aspects ofEuropean Monetary Union'. The previous SUERF Colloquium, at Cambridge in March 1985, had as its subject 'Shifting Frontiers in Financial Markets'

Describes the economic and capital market results of the institution of the single currency, the euro, in Europe after January 2000. Does it foreshadow increased capital market efficiency and labour migration, huge cross-border mergers and the division of the world into currency blocs?

The introduction of the euro was an important event for the world economy and the international political system. For the first time in history, a substantial group of European countries-eleven of the fifteen members of the European Union including three members of the G-7-have voluntarily agreed to replace their national currencies with a single currency. The euro area has already become established as the second largest currency area in the world and will therefore become a major player in the international monetary system. The creation of the euro poses a number of interesting questions. Will the euro be a strong or a weak currency? Will the euro challenge the leading position hitherto held by the United States dollar and would sharing of the burdens and advantages of reserve currency status improve or worsen the stability of the international monetary system? How will the euro affect US relations with Europe? Does the formation of the euro intensify European integration in other fields? Is a bi-polar international monetary system viable? These and other issues motivated the Luxembourg Institute for European and International Studies and the Pierre Werner Foundation to organize an international conference in Luxembourg on December 3-4, 1998, on the eve of the birth of the euro. At the outset we were aware that the issue of the euro went far beyond pure economics. Money, after all, is too important a subject to be left to economists.

Seminar paper from the year 2001 in the subject Economics - Monetary theory and policy, grade: 1.2 (A), Technical University of Berlin (European Center), course: The EU as a common economy, language: English, abstract: Within the last three years, the European financial landscape has undergone a rapid transformation that continues to astonish observers and market participants alike: Corporate and public euro bond markets have emerged whose issuing activities rival those of respective US dollar markets. Europe-wide indices have been firmly established. Institutional portfolios are being traded along pan-European sectoral rather than national lines. Cross-border mergers of banks and financial institutions on an unprecedented scale are drastically changing national banking landscapes as well as international financial structures and underlying all of this is the revolutionary emergence of a genuine European equity culture. Quite naturally, not all of these developments can be attributed to the eventual arrival of European Economic and Monetary Union (EMU). Many trends have had their precursors in the continuing liberalisation and de-regulation processes of the 1990s, as manifested in the 1992 Maastricht Treaty. However, historical data makes it difficult not to account for EMU as one major factor behind many of the most recent changes. In this paper, I will therefore argue that at least some of the above changes can best be explained by the effects of EMU. In several ways, the advent of the single currency has triggered an equilibrium shift in more than one field that would otherwise not have occurred. In order to do so, I shall first put EMU into perspective by briefly sketching its position within the wider framework of the process of European capital market integration by means of liberalisation. Second, I shall illustrate whether and to what extent the intended direct effects of EMU did in fact materialise, but also how further indirect effects go beyond these and contribute to explaining some seemingly less related developments. Last, I shall evaluate how integrated European capital markets in fact are compared to national markets, using the U.S. as a benchmark, and close with a brief discussion of potential normative implications.