European Monetary Union and International Capital Markets: Structural Implications and Risks
IMF Working Papers, May 1, 1997
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- European Monetary Union and International Capital Markets: Structural Implications and Risks
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Bibliographic details
- Authors: Garry J. Schinasi, Alessandro Prati
- Published: May 1, 1997
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451848250.001
Scope and central questions
- Analyzes the structural implications of EMU for international capital markets.
- Discusses the potential size of euro capital markets and the existing roles of European currencies in international capital markets.
- Examines the euro’s impact on international securities markets, including:
- the role of the ECB,
- the evolution of EMU securities markets,
- aspects of systemic risk management.
- Considers implications for wholesale and retail banking markets.
- Addresses broader implications of the introduction of the euro for:
- changes in international capital flows,
- international portfolios,
- and, by implication, exchange rates.
Key thematic findings (as described in the paper)
- Potential size of euro capital markets and the roles of European currencies in international capital markets are central determinants of EMU’s structural impact.
- The euro’s introduction affects international securities markets through institutional roles (notably the ECB) and market evolution dynamics.
- Systemic risk management considerations arise from changes in securities market structures associated with EMU.
- Wholesale and retail banking markets face distinct implications from EMU-induced market integration and currency unification.
- Changes in international capital flows and portfolio allocations are expected consequences of a single European currency, with implications for exchange rate behavior.
Subject areas and keywords covered
- Subjects: Banking, Capital markets, Competition, Currencies, Financial markets, Money, Securities markets, Stock markets
- Keywords: Capital Flows; Capital Markets; Competition; credit risk; Currencies; deutsche mark; EMU; EU financial market legislation; Euro; Europe; Global; government bond; institutional investor; interbank market; Italian lira; monetary policy; North America; pound sterling; repo market; reserve currency; Securities markets; single currency; Stock markets; treasury bill; U.S. dollar; WP