PracticeConsultingEuro gains global strength

Euro gains global strength

Mounting evidence suggests the euro is now the second most widely used global currency. Some 29% of UK banks' international business (with non-residents) at the end of the first quarter of 2001 was denominated in euros, second only to the mighty dollar.

Issuance of international (foreign currency) bonds in euros at the end of the first quarter had almost caught up with the dollar (37% to 42%).

And an Economist poll of seven international fund managers in the same period found that 30% of bond portfolio investments were in euros, compared with 50% in dollars, 14% in yen and just 3% in sterling.

‘The City of London has played a key role in establishing the euro as a major international currency,’ said Duncan McKenzie, director of economics at International Financial Services London, a private sector body that promotes UK financial services worldwide.

‘Since the euro was launched, all the available evidence indicates that London has fully maintained its market share and consolidated its position as the premier financial centre in Europe,’ he added.

And the Bank of England’s latest survey of practical issues arising from the introduction of the euro sees no immediate threat to euro business.

‘The bank argues most international market firms base their wholesale markets euro activities in London because of the City’s critical mass of financial services skills and the legal, accounting and other professional advice already here.

Links

Bank of England

Business makes late dash for the euro

This story first appeared in the October issue of Financial Director magazine.

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