Eurocurrencies are formed as a result of the following operations. The concept and essence of the Eurocurrency
The European market plays an important role in the functioning of the international loan capital market. The development of European markets and global financial integration are positive elements for development. They allow for better redistribution on a global scale, offer a solution to the problems posed by imbalances in external payments, and provide economic agents with important protection against risks. Finally, they stimulate competition and reduce the cost of financial and banking intermediation. The development of European markets made it possible to create the possibility of a free balance between supply and demand for financial resources on a global scale. It invites businesses to meet their financing needs without resorting to their domestic capital markets, which may be too narrow or too regulated, or to the domestic markets of other countries, which may be difficult to access.
- the part (supranational market), which carries out operations on loans and borrowings in Eurocurrencies.
The Eurocurrency market includes both interbank transactions and transactions with non-bank clients. A characteristic feature of the Eurocurrency market is the specificity interest rates, all of them are guided by the rates of the interbank market of leading financial centers... This is usually the London interbank interest rate.
Euro currency- any monetary unit invested in credit institutions outside the country origin and outside the control and jurisdiction of the authorities of that country.
Despite the prefix "euro", any hard currency can become such a currency in any region of the world. Let's say the Japanese yen in the US is the euro yen. In international bank loans issued in Euro-currencies, i.e. foreign currencies for countries where credit transactions are made, the US dollar dominates, its share is 54%.
European markets do not have the status of state markets, and transactions on them do not fall under the state tax or a specific country.
There are a number of international financial centers in which numerous lending and financial institutions are concentrated. Such markets have developed and are operating in the leading industrial countries, and recently have emerged in a number of other countries, including developing ones. Currently, the world European markets include New York, London, Zurich, Frankfurt am Main, Tokyo, Singapore, Hong Kong. In the 1980s. new centers were formed - the Bahamas, Panama, Bahrain.
Distinctive features of these markets from regional and national ones are huge turnovers. financial resources, the use of freely convertible currencies and international payment units (SDR, euro), the universalization of monetary transactions, the use of the latest tools communications and communications, restricting access for small and medium borrowers, cruel structuring(about 500 of the world's largest banks are involved in operations in these markets).
European markets play a positive role in the process of financing external deficits and the overflow of surplus capital. In redistributive activities, they have the most important advantage: they are politically neutral... Countries with a positive can make investments there without the risk of being exposed to the arbitrariness of national policies.
Operations on the Eurocurrency market are divided into several varieties:
- granting loans;
- issue of Eurobonds;
- short-term deals.
The bulk of Eurocredits is provided by international bank syndicates. For this reason, the mechanism for issuing Eurocredits will be considered on the example of syndicated lending.
Among the short-term instruments of the Eurocurrency market, one can distinguish:
- Eurocommercial bills - documented bills of exchange in Eurocurrencies for three to six months with a premium to the interest rate on Eurodollar certificates of deposit;
- certificates of deposit - certificates of banks about the deposit of funds in euro currencies. The maturity of certificates of deposit ranges from thirty days to five years;
- euronotes - short-term liabilities with a floating interest rate.
In the late 1960s. the pace of its development has increased, and from the 70s - 90s. the scale of the loan market has become enormous. An attribute of the world loan capital market is the direction of national loan capital abroad, at the disposal of a foreign bank or attracting foreign capital. Classic foreign loans and borrowings are based on the principle of the unity of the place of borrowing and the unity of the currency (usually the lender's currency). Since the late 1950s. the European market was gradually formed, which is expanding, although its instability periodically manifests itself. The Euro market is a part of the world loan capital market, where banks carry out deposit and loan operations in Euro currencies. Eurocurrency is the currency transferred to the accounts of foreign banks and used by them for operations in all countries, including the country of issue of this currency. Although Eurocurrencies operate on the world market, they retain the form of national currency units.
The prefix "euro" indicates the exit of national currencies from under national regulation and the jurisdiction of the issuing central bank. For example, Eurodollars transferred to foreign banks located outside the United States or in the free banking zone in New York. Eurodollar transactions are not subject to US regulation. Originally, Eurodollars were dollars that belonged to foreigners and were deposited in European banks outside the United States.
Dollar deposits outside the United States have existed since late XIX c., when three-month bills were paid through deposits in European banks. Unlike the modern Eurodollar market, there were no international interest rates back then; operations and number of participants were insignificant; dollar deposits, falling into the hands of borrowers, were usually not assigned in the future, but were used in the United States.
The market for Euro currencies, first Eurodollars, has emerged since the late 1950s. on the basis of interbank correspondent relations. If the owner dollar deposit transfers it from an American bank to a foreign one, then a eurodollar is formed. The essence of the transformation of the dollar into the Eurodollar is that the funds of the owner of the dollars come as a deposit at the disposal of a foreign bank, which uses them for lending operations in any country.
Gradually, the concept of eurodollars expanded to include dollars used foreign banks located both outside the United States and on their territory in the free banking zone.
Since the 1960s. the Eurocurrency market began to include the currencies of other leading countries.
The development of the Eurocurrency market was determined by the following factors:
The need for flexible international monetary services for foreign economic activity;
The introduction of convertibility of leading currencies from the late 1950s - early 1960s;
Liberalization of national legislation stimulated the placement of funds of banks and firms in foreign banks in order to extract profits.
Initially, this practice applied to the United States, where in 1957 interest rates were lowered and the payment of interest on demand deposits with a maturity of less than 30 days was prohibited. As a result, it became more profitable for the owners of dollars to deposit them abroad. This is associated with the emergence of Eurodollars - US dollars, transferred to the accounts of foreign banks and used by them for deposit and loan operations in all countries. With the creation of a free banking zone in New York in 1981, where the regime of operations of banks with non-residents is similar to the regime of euro-currency transactions, the territory of the United States itself was included in the geography of the eurodollar market. The term “euro currency” also refers to dollars used for transactions in Asia, where they are often referred to as Asian dollars (Asian dollars), and in Arab countries (Arabdollars).
Moving on to the fourth question
4th question:
International liquidity and its components
As for international credit means of circulation, the regulation of the rules for their use is carried out in accordance with unified international standards. Among them are the Geneva Conventions (bill and check). The regulation of international settlements is carried out at the level of the national and world monetary systems in accordance with the Unified Rules and Customs for documentary letters of credit and collection. The regulation of international monetary liquidity as an element of the monetary system is reduced to the provision of international settlements with the necessary means of payment.
International currency liquidity (MVL) - the ability of a country (or a group of countries) to ensure the timely repayment of its international obligations by means of payment acceptable to the creditor. From the point of view of the world economy, MVL means a set of sources of financing and crediting of the world payment turnover and its provision with international reserve assets. In aspect national economy of the MVL country serves as an indicator of its solvency. MVL includes four main components: the country's official gold and foreign exchange reserves, accounts in SDRs, and a reserve position in the IMF (the right of a member country to automatically receive an unconditional loan in foreign currency within 25% of its quota). The indicator of MVL is usually the ratio of official gold and foreign exchange reserves to the amount of annual merchandise imports. The value of this indicator is limited, since it does not take into account all forthcoming payments, in particular, for services, as well as financial transactions related to the international movement of capital and loans.
The regime of the foreign exchange market and the gold market is subject to national and international regulation. Finally, an important element of the monetary system is institutional. We are talking about the regulation of the activities of national governing and regulatory bodies. currency relations countries (central bank, ministry of economy and finance, in some countries - foreign exchange control authorities).
National currency legislation regulates operations in national and foreign currency (ownership, import and export, purchase and sale). Interstate currency regulation is carried out by the IMF, in the Economic and Monetary Union of the EU, which replaced the European monetary system in 1999, by the European Central Bank. These institutions strive to develop and maintain a safe, crisis-free development of international monetary, credit and financial relations.
Moving on to the fifth question
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The meaning of the word Eurocurrency
Eurocurrency in the crossword dictionary
Economic glossary of terms
euro currency
cash banks located in other, mainly European, countries and denominated in the currency of that country. For example, the deposit of a Japanese bank in a European bank in Japanese yen gives reason for this bank to issue a loan in euro yen;
national currencies individual countries that are in circulation outside the issuing country, transactions with which are carried out foreign banks on a significant scale.
Glossary of financial terms
EURO CURRENCY
EUROCURRENCY (eurodollar, eurofrank, etc.), in which banks, firms keep their capital in foreign banks.
Wikipedia
Euro currency
Euro currency- currency that is placed in the form of a deposit in foreign banks located outside the country of the issuer of this currency.
Prefix " Euro»Does not mean at all that the specified currency is located in Europe, that it is owned by Europeans or that it is deposited in a European bank. This only indicates that the territorial location of the bank that accepts the investment does not coincide with the territory where the currency is issued and is a legal tender. So, a eurodollar is a dollar deposited in a bank outside the United States, for example, dollars in a Brazilian or Japanese bank. The Eurodollar transaction is not regulated by the United States. The prefix "euro" indicates that the currency is out of the control of national monetary authorities, in particular the issuing central bank.
The depositor's citizenship or domicile does not affect the determination of whether the currency will receive the prefix "euro". Quite often, an investment is made by a resident of the issuing country of the specified currency, it will not be called a Eurodollar. Such a transaction is an internal investment that is fully subject to US law.
The euro currency also includes the funds that the bank accumulates for its customers in a currency that differs from the currency of the country where the bank is located.
The most common Euro currency is Eurodollars. Besides them, there are Euro-francs, Euro-pounds, Euro-yens and others.
The Eurocurrency and Eurobond markets have the advantage that they are much less subject to regulation by the legislation of the country of the currency issuing, including the size of the interest rate and reserve requirements.
Examples of the use of the word Eurocurrency in literature.
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Eurocurrency and its importance in the international market
Introduction
Eurocurrency is a currency that is placed in the form of a deposit in foreign banks located outside the country - the issuer of this currency.
The prefix "euro" does not at all mean that the specified currency is located in Europe, that it is owned by Europeans or that it is deposited in a European bank. This only indicates that the territorial location of the bank that accepts the investment does not coincide with the territory where the currency is issued and is a legal tender. So, a eurodollar is a dollar deposited in a bank outside the United States, for example, dollars in a Brazilian or Japanese bank. The operation with the Eurodollar is not regulated by the United States (the country - the issuer of the currency). The prefix "euro" indicates that the currency is out of the control of the national currency authorities, in particular the issuing central bank.
The depositor's citizenship or domicile does not affect the determination of whether the currency will receive the prefix "euro". Quite often, an investment is made by a resident of the issuing country of the specified currency (for example, an American opens a dollar deposit in Russia). Conversely, a dollar deposited in the US by a German, even in a foreign bank (for example, in a branch of a German bank), will not be called a Eurodollar. Such a transaction is an internal investment that is fully subject to US law.
The euro currency also includes the funds that the bank accumulates for its customers in a currency that differs from the currency of the country where the bank is located.
The most common Euro currency is Eurodollars. Besides them, there are Euro-francs, Euro-pounds, Euro-yens and others.
The Eurocurrency and Eurobond markets have the advantage that they are much less subject to regulation by the legislation of the country of the currency issuing, including the size of the interest rate and reserve requirements.
Eurocurrencies are currencies transferred to accounts of foreign banks and used for operations in all countries, including the country of issue of this currency. The prefix "euro" indicates the release of the nat. currencies from under nat. regulation and control nat. monetary authorities.
1. Historical preconditions for the creation of the European currency
From ancient times to the present day, Europe has been shaken by wars and conflicts associated with the redistribution of spheres of influence, disintegration and mergers of states. Before the formation of feudalism, a decline and disunity was established on the territory of Europe, associated with a gradual departure from pagan culture. At this time, the previous economic, trade and political ties were broken, various national communities lived independently of each other. The main problem there was security due to the constant raids of nomads, Muslims and Vikings. As a result of the destruction of traditional economic ties with the Roman Empire, Europe turned into a closed economic space. After the approval of the feudal order as a result of the strengthening of the defensive and offensive forces, three rules were laid in the basis of the economy: the feudal lord was obliged to bear military service; he had the right to a land plot; he was directly subordinate to his overlord. An alliance between the state and the Christian church arose.
From now on, European states not only ensured their security from external attacks, but were also able to move on to the conquest of new territories. At the same time, devastating military clashes within Europe began. For this, the monarchs created costly bands of mercenaries who did not recognize any discipline. These same mercenaries were used by large trading companies to fight the conquered peoples of Africa and Asia. By the middle of the sixteenth century. the borders of states of a new type, with a non-feudal type of government, were outlined. Costly wars of a religious nature undermined economic development. Marauder bands ravaged Europe; pirates raged in the seas and oceans. Holland was the first to begin to change this position, which created a professional army. France and England followed suit.
Since then, economics and politics have merged as the cost of maintaining the armies led to the creation of state apparatus and tax systems.
The result was a stable order based on military-political balance. This led to economic development, the creation of new types of industries based on hired labor.
Subsequently, Europe was shaken by the French Revolution and the subsequent wars of France with other states; the activities of Napoleon, which led to the capture of almost all countries except England and Russia. By the first half of the nineteenth century. after the defeat of the Napoleonic army, a new pan-European system began to form. It was supposed to ensure the prevention of revolutionary movements. However, the conservatism of the Holy Alliance of Austria, Prussia and Russia came into conflict with the rapid development of reality - the technical revolution, the emergence of a new bourgeois class.
The period before World War I was characterized by a semblance of calm; the accumulated disagreements led to the fact that the war of 1914-1918. passed with an unprecedented scale of destruction and conquest. One of its results was the establishment of a new order on the territory of Russia, its isolation from other states. The ideas of European integration were revived with renewed vigor. For many centuries they were discussed by the Christian Church, later, with the split of Catholics and Protestants, the "European idea" acquired an anti-war tone, many famous philosophers and scientists of those times dedicated their works to it.
As a result of the Second World War, these ideas began to be translated into reality, primarily due to the reality of the threat from the USSR.
euro currency bank depositor euro loan
2. Eurocurrency market and European capital market
The European market is a market in which operations are carried out on loans and borrowings in the Euro currency.
Eurocurrency is a convertible currency of any country, transferred to the accounts of foreign banks and used by them for operations in all countries, including the country - the issuer of this currency.
European markets are not governmental, state markets... Their emergence is due to the needs of enterprises, investors, as well as some countries. Operations on European markets elude government foreign exchange regulation and tax legislation specific country.
European markets emerged in the late 1950s. The reasons for their occurrence include:
* 1) the appearance of proposals for the placement of dollars outside the United States;
* 2) great demand for US dollars in Europe;
* 3) US regulation complicating currency operations with the dollar domestically compared to free market transactions;
* 4) the desire of European banks to find an instrument for financing international operations.
At the beginning, only the Eurodollar dominated the Eurocurrency market.
The Eurodollar is the US dollar received as a deposit by a Western European bank. A dollar recorded in a bank's liability as a liability in a French or British bank is a Eurodollar. Gradually, the eurodollar developed into a phenomenon of the eurocurrency. So, for example, the French franc or German mark in the bank's liabilities in Luxembourg or Great Britain was a Euro-franc or Euro-mark.
In the current operations on European markets, transactions with Eurodollars (over 70%), Euromark (20%) and Swiss Franc (6%) prevail.
It should be noted that the emergence of the Eurodollar was largely facilitated by the authorities of the USSR. According to M. Pebro, the Soviet authorities did not want to either invest dollars in American banks, or place them on the US foreign exchange market. This position was explained, in particular, by the unwillingness to strengthen the financial power of the United States, fear of blocking the accounts of the USSR in the event of possible conflicts, etc. As a result, the dollars that belonged to the USSR were invested in the Eurobank, a branch of the State Bank of the USSR in Europe, and then in the Moscow National Bank in London. In turn, British banks have also made efforts to create the Eurodollar.
The Eurocurrency market is international in nature. Large operations in this market take place in Asia (Hong Kong and Singapore), the Caribbean (Bahamas and Cayman Islands), Canada, and London. London is the leading center of the Eurocurrency market. Luxembourg is the center of Euromark deposits, while Brussels and Paris are the centers of Euromark deposits. 60% of transactions with Euro-currencies are carried out in these European capitals.
The main sources of Eurodollars are:
* 1) foreign countries or citizens wishing to keep dollars outside the United States;
* 2) international corporations and European banks that have cash reserves and exceed current needs;
* 3) reserves of countries with a positive foreign trade balance, for example Japan, Taiwan, Germany.
The demand for Eurocurrencies is presented by individuals, companies, national governments, who need capital, investments and funds to pay off debts and interest on them.
In the early 80s. the volume of the eurodollar market exceeded the capabilities of the national banking system USA. In these conditions, the US government decided to introduce international banking services, which allowed American banks to attract a part of the Eurocurrency market in the United States. With regard to international banking services Neither compulsory reserve requirements nor federal deposit insurance apply. They are also not subject to federal taxation or taxation. income tax New York State. Active development of European markets in the 60s and 70s. led to the fact that in the 80s - early 90s. they have significantly diversified their activities. Since the 80s. markets are developing rapidly valuable papers: Eurobonds, Euros, Eurobills, financial innovations. For example, Eurobonds are issued for the implementation of Euro-loans.
Euro-loans, as a rule, are issued with the help of large banks, organizing international consortia and syndicates for their issue. Banks attract various credit and financial institutions to participate in consortia: pension funds, insurance and investment companies... By the early 90s, euro loans accounted for about 80% total amount international loans.
Eurobonds (Eurobonds) are usually issued for a period of 7 to 15 years. In the 80s. there were bonds issued for 30 and 40 years. The main borrowers are governments, international organizations, TNCs, local authorities, government agencies.
Eurobonds can be issued by foreign or national companies, individual states. Eurobonds are denominated in foreign currency... For example, a bond denominated in Deutsche Marks is a Eurobond if it is sold outside Germany, whether it was issued in Germany or elsewhere. Most Eurobonds are denominated in dollars and traded in Europe. Eurobonds are bearer bonds. This means that they are not registered and there is no tax on the income received from them. A large number of Eurobonds are held in Switzerland in the accounts of non-residents of this country.
Eurobonds can bring either fixed or floating interest to their holders. Floating rate Eurobonds have coupon interest payments pegged to the LIBOR rate. The interest rate can be adjusted once every 6 months or annually. By the mid-80s. most Eurobonds had floating interest rates.
Some Eurobonds provide the right to choose their conversion into a certain number of shares of the company - the issuer of these obligations. Convertible Eurobonds are referred to as “equity-related obligations”.
3. European monetary system: the first step towards true monetary integration
The initiators of the creation of the EMU were German Chancellor Helmut Schmidt and French President Valerie Girak d'Estaing, who presented this idea to the heads of other European Union states in Copenhagen in April 1978. The agreement on the creation of the EMU entered into force on March 13, 1979; out of nine member countries Only Great Britain did not join the EU. With the creation of the EMU, European countries declared independence from the global monetary system, for the first time they decided to independently determine their monetary policy. Instead of focusing on the dollar, they decided to focus on the stability of their currencies. The normal state was a stable parity ratio, it could be revised only when absolutely necessary, by decision of the Commission of the European Communities and the member states. A collective unit of account, the ECU, was introduced, the rate of which was determined based on the exchange rates of the national currencies of the member countries. In the settlement mechanism, both national currencies and the ECU were used in parallel. states a-participants in the field of monetary policy for the first time embarked on such a movement from national sovereignty to collective interaction.
The ECU was backed by funds in the amount of 20% of the gold and foreign exchange reserves of the participating countries, which were deposited in exchange for an equivalent amount of ECU for deposits in the European Monetary Cooperation Fund.
The main directions of action of the EMU members outlined the maintenance of market rates of national currencies with the help of foreign exchange intervention, raising resources to normalize the balance of payments, adjusting interest rates and budget deficits to protect exchange rates; in extreme cases, it was allowed to tighten control over the movement of capital, freeze prices and incomes.
Over time, it became clear that the original plans were not fully implemented, in particular, the European Monetary Fund was not created, which was supposed to unite all actions within the EMU. States have not always adhered to a single, parity-based ECU economic policy... For 13 years, the existence of the EMU has been quite successful. These years are subdivided into three periods:
From the date of entry into force of the agreement until March 1983. - began calmly, but sustaining economic growth in West Germany led to a weakening of the brand. During this period, 7 revisions of the central courses took place. One of the reasons for the revisions was the second energy crisis of 1979-1980, which resulted in a surge in inflation, an increase in balance of payments deficits, a drop in industrial production and an increase in unemployment. In general, these revisions often took place against the background of political events, in particular - the change of power, which entailed adjustments to the state policy, for example - the victory of the socialist François Mitterrand in the elections in May 1981;
The success of the EMU was also due to external circumstances. Changing them in the future, together with the failure to take the necessary measures by the governments of the countries, brought serious trials to the EMU.
4. Economic and monetary union. Introduction of the Euro
The second half of the 1980s was characterized by an unprecedented rise in the uniting Western Europe. At the same time, monetary integration lagged behind economic cooperation. The stability of the EMU gave rise to expectations of its development into an economic and monetary union, which differed from the EMU in a greater degree of integration. In April 1989. the Delors committee, which included the central bank governors of the EU member states, three independent experts and a representative of the EU Commission, presented a report in which he spoke in favor of the early introduction of a single currency at the final stage of the creation of the EMU. By this time, the governments of the EU member states came to an agreement on the continuation of integration and, in particular, the creation of the EMU. The Delors Committee's report was adopted unanimously. True, he was criticized for excessive continuity with Werner's report, the key provisions of which, for example, the convertibility of currencies, have long become a fait accompli. However, this continuity and some archaic definitions helped the unanimous adoption of the report by the governments of European countries, which are traditionally reluctant to change the established foundations.
In June 1989. The Maastricht summit took place, at which two main organizational proposals were adopted, expressed by the Delors committee: to begin the first stage of the transition to an economic and monetary union from July 1, 1990. and to convene an intergovernmental conference to work out amendments to the fundamental treaties, without which further progress would be impossible. The conference participants put forward requirements, the observance of which was mandatory for joining the EMU: on the limitation budget deficits up to 3%, and public debt up to 60% of GDP.
Three stages of the formation of EMU.
The first stage took place on July 1, 1990. until December 31, 1993 During these years, all the preparatory measures required by the Maastricht Treaty on the European Union were carried out. Restrictions on the free movement of capital within the EU and between the EU and other countries were removed.
The second stage - from January 1, 1994. until December 31, 1998 - is devoted to further preparation for the introduction of the single European currency. The European Monetary Institute was established. Legislation has been adopted to restrict financing of the public sector, and the privileged access of enterprises and organizations in the public sector to funds of financial institutions has been canceled. In addition, measures were taken to comply with the constraints on the budget deficit and state debt... Central banks received, where necessary, final statutory independence from their governments. May 2, 1998 The EU Council made a decision on which of the states are allowed to switch to the euro from the beginning of the third stage of the EMU formation.
The third stage began on January 1, 1999. and continued until July 1, 2002, after which the euro finally became the only legal tender for all countries participating in its zone. Are now firmly and definitively fixed exchange rates between euro and national currencies countries participating in its zone. The Euro becomes their common currency, replacing the ECU in a 1: 1 ratio. The European System of Central Banks is launched, which will encourage the introduction of the euro in international foreign exchange markets. Wholesale deals from euro to open market available for banks from January 1, 1999, retail - after January 1, 2002. Issue of debt obligations government agencies from January 1, 1999 produced only in euros. Enterprises have the right to carry out settlements in euros from January 1, 1999. Individuals will be able to use euro coins and banknotes from January 1, 2002, when they begin to be put into circulation, simultaneously with the withdrawal of national banknotes from circulation.
European Central Bank.
The Governing Council of the European Central Bank is part of the European System of Central Banks. In his subordination are the governors of supranational central banks, members of the executive directorate. The ECB directs the activities of the national central banks and its authorized counterparties.
The main goal of the European System of Central Banks is to maintain price stability. To this end, its responsibilities include the monetary policy of the EMU, foreign exchange transactions with third countries, storage and management of liquid international reserves of the participating countries, ensuring the smooth operation of payment and settlement systems. The sole shareholders of the European Central Bank are national central banks... The creation of the ECB is an important step towards a united Europe. He, like national central banks at the present time, must be independent of political power, and have sufficient freedom. Powers are transferred from national governments to the ECB, leaving these governments with few ways to influence monetary policy. They have no real power to manage the bank. This can make it difficult to work if national interests run counter to the ECB's policy, in which case a situation may arise, the way out of which will happen on the principle of "all or nothing," it will become possible for the participants to leave the economic and monetary union. At the same time, the independence of the ECB is necessary for the depoliticization of the monetary and financial sphere: from the experience of the past decades, it is known that politics often had a negative impact, poorly predictable from an economic standpoint.
Central European bank you need to win your legitimacy, this requires at least successfully fighting inflation without negatively affecting the production of goods and services.
When determining the type of construction of the ECB model, the creators had a choice between the American and German models. monetary policy... As a result, the ECB was originally supposed to get the main feature of the German model: price stability, maintaining them as much as possible. low level prevail over other goals. At the request of the European Monetary Institute, the annual inflation rate should not exceed 2%. Unlike the United States, the German model is based on minimum reserve rates and rare open market transactions to reduce fluctuations in liquidity and stable interest rates. The disadvantage of this model is the actual taxation of banks additional tax if interest on reserve deposits is not paid or is significantly lower than the market; there is a desire to reduce the reporting results for the past period in order to reduce losses from high reserve rates at low interest rates.
As a result, in the summer of 1998. it was decided to combine the German and American models... Mandatory provisioning is introduced, but assets less than 100 thousand euros are exempted from it, and for larger ones the provisioning rate will be 2%. Interest will be charged on the reserves. Support for stable prices can be carried out both by regulation of short-term interest rates and by interim regulation money supply... These measures are characterized by a complex predictability of the impact on the economy in each case, but the ECB said it will use the positive experience of national central banks.
5. Euro and dollar
Today, the American dollar remains the dominant monetary yardstick. In the 90s, 50-60% of foreign exchange reserves of states, 60-70% of exports and imports, 70% bank loans, about 50% of bond loans, 80% of transactions in the foreign exchange markets. In 80 percent of all financial transactions, the dollar is one of the parties. But the emergence of the euro, according to a number of experts, should be regarded as the beginning of the process of partial de-dollarization of the world economy. The United States economy is not strong enough for Greenback to remain the only favorite financial markets... It is common knowledge that the United States accounts for 27 percent of world production and less than 20 percent in world trade. However, when foreign governments and their citizens keep their savings or settle in dollars, they indirectly subsidize the United States, providing them with a high, or rather, an inflated standard of living that does not match their real income. With the strengthening of the euro, according to an expert from the Washington Post, "the United States will have to live within its means, like everyone else." Special attention should be paid to the opinion of Robert A. Mundell - the author of the theory of optimal currency zones (which formed the basis for the currency integration of the EU countries), winner of the 1999 Nobel Prize in Economics: the euro exchange rate during the current year may turn out to be higher than the US dollar. He connects his forecast with the fact that the economic growth The United States, which became one of the reasons for the strengthening of the dollar in Lately, will slow down already in the current or next year due to high oil prices, and the need to finance the deficit in the US balance of payments will significantly strengthen the position of the euro. At the same time, the recent depreciation of the euro against the dollar was caused by objective reasons for the European integration process, which is generally positive for the European economy and will further stimulate its recovery. According to Mundell, in the coming years, the euro area will expand significantly, and in 10 years it may include up to 50 countries. However, the zone of influence will also expand. American currency, due to which the strength of these currencies will remain approximately equal. The scientist's opinion is confirmed by events in the foreign exchange markets. During the trading held on May 30 of this year on the exchanges of Southeast Asia, the euro rate rose to a recent record level of 0.92 dollars. While this increase in itself is not particularly high, it could nevertheless mark a reversal towards a fairly stable trend.
Conclusion
For all its problems and troubles, Europe is nevertheless not straying from its course, and its transformation into a kind of United States of Europe is a matter of time. Almost all countries and peoples of the continent are involved in the construction of a common European home, and the coming century will be marked by the transition of Europe into a completely new hypostasis - into a powerful multinational state formation. Up to thirty states are built into this new conglomerate - almost all of Eastern Europe (the first, most likely, will be Ukraine), island subjects in the Mediterranean and, apparently, Turkey. However, in this alliance of equal partners, four leading leaders will dominate and set the tone - Germany, France, Great Britain, Italy. This is obvious even now. Indeed, in the capitals of these countries, all the cardinal decisions are worked out for their subsequent approval by the rest. But the deed is done - there is no turning back for those who once entered the European Union. Everything is designed in such a way that outside this coalition of countries that have voluntarily agreed to join it, none of them will be able to exist - a dissident country is doomed to inevitable death. As a result, a united Europe, tightly bound by the hoops of mutual obligations and common rules of conduct for all in internal life and external affairs, in its power and influence can become something more significant than a superpower. She has a chance to find a leading, dominant place in the world.
As for the European currency itself, in my opinion, there are many contradictions. As mentioned earlier, United Europe is a set of states with deep traditions. The introduction of the euro thus destroys all traditional currency ties. Francs, marks, pounds sterling ... Now it's all in the past, but in the minds of many people it will remain true national currencies for a long time.
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The Eurocurrency market is a universal international market that combines elements of foreign exchange, credit and commission transactions. The deposit and loan operations performed on it are often accompanied by the transfer of resources from one currency to another. The extraordinary mobility of funds on the market, with a huge scale of operations, has a significant impact on the monetary position of the entire capitalist world. Almost at the beginning of its existence, the Eurocurrency market was part of the foreign exchange market.
The purpose of this work is to review and analyze the mechanism of functioning of the eurocurrency market, the factors of its development, as well as highlight the features of this market.
The market for Euro currencies, first Eurodollars, emerged in the late 1950s on the basis of interbank correspondent relations. If the owner of a dollar deposit transfers it from an American bank to a foreign one, then a eurodollar is formed. The essence of the transformation of the dollar into the Eurodollar is that the funds of the owner of the dollars come as a deposit at the disposal of a foreign bank, which uses them for lending operations in any country. Gradually, the concept of Eurodollars expanded to include dollars used by foreign banks located both outside the United States and on its territory in the free banking zone.
The Eurocurrency market has a relatively independent and extremely flexible system of interest rates, which is significantly different from those in the national markets and covers a wide range of lenders and borrowers in different parts of the world. While differing from the national markets of loan capital, the Eurocurrency market is, at the same time, closely related to them, since it uses practically the same types of banking operations and monetary documents and also intertwined cash flows.
Operations in the Eurocurrency market are carried out by establishing direct contacts or using the services of brokers. Transactions are usually made by telephone or fax, followed by written confirmation, which is the only document.
The movement of capital from country to country through operations in the Eurocurrency market has a significant impact on the course of the post-war economic development capitalism, closely links international market with national capital markets.
Consider the features of the European market:
1. Huge scale. The size of the European market is large: gross volume - about 4.5 trillion. dollars (against 2 billion dollars in 1960); 2/3 of the resources of the European market come from developed countries... Moreover, the gross volume, including re-invoicing, is more than 1.5 times higher than the net volume of the European market. This is due to the movement of the credit multiplier - a coefficient that reflects the relationship between deposits and the increase in lending operations through the creation of interbank deposits. The same amount of Eurocurrencies is used repeatedly for deposit and loan operations during the year.
2. Institutional peculiarity. The peculiarity of the European market is the allocation of the category of Eurobanks and international banking consortia. The backbone is formed by TNB - gigantic international credit and financial complexes of a universal type, having an extensive network of branches abroad, carrying out operations in many countries, in various fields and currencies. TNBs are in a specific battle to get a mandate from clients to set up a consortium or syndicate to place a loan, which is profitable, strengthens client relationships and serves as an advertisement.
3. Using the currencies of leading countries and some international currency units as the currency of transactions. The US dollar dominates the Eurocurrency market, although its share is declining. In the European market, transactions are carried out with Euro yens (6%), Euro-Swiss francs (6%), Euro-French francs (1%) and other currencies. Euro is being squeezed out of international (as well as domestic) transactions by national monetary units countries that have joined the European Monetary Union. The term "euro currency" refers to funds not only in Western Europe, but also outside of it, although dollars used for operations in foreign exchange markets in Asia are often called Asian dollars (azidollars), and in Arab countries - Arabdollars.
4. Simplified standardized procedure for transactions using the latest computer technology. Transactions on the European market are carried out by telephone, telefax with the exchange of telegraphic confirmation on the same day, which serves as the only document. In this case, no collateral is required: the transaction is guaranteed by the authority of the counterparty bank or non-bank client with the highest rating (AAA). The terms of Euro deposits range from 1 day to 1 year, sometimes up to 2 years, usually 6 months. The typical amount of interbank deposits is $ 5-10 million, sometimes several times more. Credit operations are committed in the amount of from 1 million to several hundred million US dollars
Examining the latest data on the euro market, we can say that the dollar has shown weakening since March 2009 as investors preferred to invest in assets with higher yields amid signs of a recovery in the global economy, and this week the US currency hit an annual low against the euro and a basket of currencies due to surges in stock and commodity markets. The dollar was supported by a correction in the stock markets, and many investors preferred to take profits or simply close positions. However, the global weakening trend in the dollar is likely to persist.
List of used literature:
1.http: //finance.mail.ru;
2.http: //www.izvestia.ru;