Wednesday, May 29, 2019

The Euro :: Essays Papers

The EuroIn Europe, the debut of the euro is widely hailed as the most burning(prenominal) event affecting the international monetary landscape since the breakup of the Bretton Woods System in 1971 to 1973, or since the Bretton Woods Agreement in 1944, or by chance even since the founding of the Federal Reserve System in 1913. It has become a contest for European officials and commentators to see who can push the analogy vertebral column furthest in time. Eminences elsewhere in the world have similarly greeted the euro with high hopes and great expectations. Only in the United States has the euro been greeted with a yawn. It is not trying to see why. So far, its advent has not weakened the international financial position of the dollar if anything the opposite has been true. The dollar has been strong against the euro rather than weak for frequently of last autumn the fear was that the euro, which had started out being worth well more than a dollar, might plunge through the dread ed psychological barrier of one to one. There has been no sign of Asian and Latin American central banks replacing their dollars with euros en masse, as prominent commentators had predicted. The United States has not had to assortment the way it does business at Group of Seven summits, the OECD, or the IMF. Many Americans thus cannot help but feel that the euro is a tempest in a teapot. The Euros Slow Start Perhaps Asian and Latin American central banks have been waiting to dump their dollars until the euro stabilizes. Through much of 1999 the euro was weak because the European parsimony was weak governments and private investors were understandably reluctant to overweight a currency that seemed to be losing value by the day. Investors were slow to move into euros because they thought that Europe was little well prepared than the United States for Y2K. They worried about the stability of the European banking system because European banks had lent much more aggressively than thei r American counterparts to Indonesia, Korea, Malaysia and Thailand. merely now that European growth is finally accelerating, the euro could strengthen, and the anticipated shift into euros at last could get under way.Perhaps governments and investors have been reluctant to embrace the euro because of a series of missteps by the European Central Bank. In the early months of 1999, ECB officials issued a series of confusing and contradictory statements, and on several occasions the ECB boards decision on whether or not to raise interest rates leaked to the press in advance of the official announcement.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.