The Eurocurrency Markets, Domestic Financial Policy and International Instability

This study highlights the growing interdependence that exists between the financial markets of industrial and developing nations, by determining the role the Euromarkets have played in creating this dependence and by examining its effect on the stability of the international monetary system.

Contenu

Introduction: history of the Eurocurrency markets. Part 1 Interdependence, arbitrage and the removal of UK capital controls: interdependence and monetary policy; the effect of the Eurocurrency markets on the arbitrage process - the Mundell-Fleming propositions; some empirical analysis of the US and the UK - Eurodollar-Eurosterling relation and US domestic arbitrage, domestic sterling and Eurodollar, domestic sterling relations, interdependence and monetary policy in the UK. Part 2 Competition, efficiency and stability in financial markets - the case of the international credit markets: competition, stability and efficiency in international banking; maturity transformation, risk-return analysis and credit rationing in the Euro-markets; policy implications of the internationalization of capital.