Introduction

Abstract

Since its emergence some twenty years ago the Euro-currency (or simply the Euro-) market has grown to play an increasingly important role in international monetary relations and to be a source of some concern to various national authorities. This text examines the economics of the system and its policy implications. The emphasis of the book is on the Euro-currency money market, that is, an international market for non-bank and interbank deposits and short- and medium-term bank credits. In this market all major currencies are actively borrowed and lent. The US dollar is, however, overwhelmingly the most important — in the form of Euro-dollars. The activities of banks in this market are known as Euro-currency banking and are distinguished from other types of banking activities. This introductory chapter defines some of the characteristics of Euro-banking and outlines the text.