III EMU: Systemic Implications and Challenges
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International Monetary Fund
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Language:
English
Print Publication Date:
08 Dec 1997
Keywords:
WEFS; market; debt; bank; loan; market surveillance; market integration; EMU monetary policy; euro market; EMU reserve; EU bank; Capital markets; Commercial banks; Securities markets; Payment systems; North America; Europe

Abstract

The creation of EMU is one of the most important international monetary developments in the post-Bretton Woods period. With the establishment of EMU, the euro will become the second most important official reserve currency in the world,13 and the future European Central Bank (ECB) will assume its place as the supranational institution to manage a “multistate” currency. Although the political, cultural, and economic challenges are formidable, the euro has the potential to reshape European and international financial markets and to transform the multilateral international monetary system into a tripolar or even bipolar system.14 At a minimum, the euro is likely to assume a more significant role in international trade, private financial transactions, and official reserves. Whether the euro will initially be a strong or a weak currency will depend in large part on the ability of EMU member countries to continue along the path of fiscal consolidation and structural reform and on the credibility of the ECB.

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Cover International Capital Markets
International Capital Markets
Developments, Prospects, and Key Policy Issues 1997
ISBN:
9781557756862
ISSN:
0258-7440
Publication Date:
08 Dec 1997
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781557756862.083
Pages:
280

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