The Euromarkets, Risk and International Credit

Abstract

During the 1970s, the Euromarkets have become a pace-setter for international finance. It might have been difficult to predict this ten years ago, since the world of international finance was then grappling with the dual problems of spiralling inflation and a weakening Bretton Woods fixed-exchange-rate structure. In this chapter we review the role of the Eurocurrency market as an integrating force, consider the dual problems of capital abundance and capital shortage, and examine the nature of risk in Eurolending where banking supervision is minimal.