Euro

By:- Niharika, Surbhi &

 OBJECTIVE
• All about Euro – History
• Euro - unknown facts & Profile
• Euro Credit
• Euro Currency
• Euro Bond
• Euro Dollar
• Euro Currency Market
• Euro Deposit
 HISTORY
1957 – The Treaty of Rome 

Objective:

To remove trade and tariff barriers

and to form a common market.
 HISTORY
1979– European Monetary System
(EMS)

Objective:

To create a common currency.

 HISTORY

1988 – Economic and Monetary Union

(EMU).
Objective:

To realize Economic Monetary

Union
 HISTORY

1992 – Foundation of the European

Central Bank.
 HISTORY
December 1995 – The official
graphic symbol of the euro € is derived from the
Greek letter epsilon, denoting the first letter of
the word Europe.
 HISTORY
Ireland,
Austria,
Belgium,
Spain,
Italy,
Luxembourg,
the Netherlands,
Portugal,
France,
Finland, Germany, and from the
beginning of 2001, Greece.
 HISTORY

1 January 2002 – Twelve

European Union Member
States introduced the euro
cash.
 HISTORY

1 January 2008 - The euro

was introduced in two other
states of the European Union -
Cyprus and Malta.
 ROLE OF EURO IN
EUROPE
The introduction of the euro is an
important stage in the
development of the European
Union (EU) and the most significant
monetary reform in the
global history. The introduction of
the euro is the actual
implementation of the Common
ROLE OF EURO IN THE
WORLD

Royer
picture
As a global currency, the euro is taking
on an important role as an international
investment and reserve currency.
 INTERESTING FACTS
The European Union’s (EU)
common currency, the euro,
is legal tender not only in
the fifteen euro area
Member States (Ireland,
Austria, Belgium, Cyprus,
Greece, Spain, Italy,
Luxembourg, Malta, the
Netherlands, Portugal,
France, Slovenia, Finland
and Germany), but also
 INTERESTING FACTS
The EU has concluded
special agreements with
Monaco, the Vatican and
San Marino for the euro as
legal tender in these
countries. They have the
right to issue euro coins with
their national sides, but may
not issue euro banknotes.
Thus, the tradition of
agreements that existed
 INTERESTING FACTS
In Andorra, the euro
replaced the Spanish peseta
and the French franc that
were used in this principality,
though an agreement
between this country and
the EU has not yet been
signed.
 INTERESTING FACTS
Also, the euro is used as a
currency in Montenegro
and Kosovo. Here, the euro
replaced the German mark
which, up to then, had been
used as the local de facto
currency.
 INTERESTING FACTS

Overseas departments,
territories and islands
associated with or within the
euro area Member States also
use the euro. Thus, the euro
circulates in the Azores,
Guyana, Guadeloupe,
Maiote, Martinique,
Reunion, San Pierre and
EURO NOTES
 DOCUMENTS
On 30 May 2005 the Government of the Republic
of Lithuania formed the Commission for the
Coordination of the Adoption of the Euro in
the Republic of Lithuania, and set its main goal
– to ensure the preparation and proper
implementation of the National Changeover
Plan.

The Government of the Republic of Lithuania

approved this plan by its Resolution No. 1050 of
29 September 2005.
 
On 25 April 2007 the Government of the Republic
 EURO CURRENCY
• A common currency used by many
European countries. The euro was
established in 1999 when 11
European countries adopted a
common currency in order to
facilitate global trade and encourage
the integration of markets across
national borders. Euro banknotes and
coins began circulating in January
2002.
• Euro credit or Euro Loans are the loans extended for one
year or longer. The market that deals in such loans is called
Euro Credit Market.

Characteristics of Euro credit

• A major part (more than 80 %) of the Euro debts is made in
US dollars. The second (but far behind) is Pound Sterling
followed by Deutsch mark, Japanese yen, Swiss franc and
others
 
• The common maturity for euro credit loans is 5 years. Since
Euro banks accept short-term deposits and provide long-
term loans, it is likely that asset liability mismatch may
arise. To avoid this Euro banks often extend floating rate
 PARTICIPANTS IN EURO
CREDIT MARKET
• The major lending banks in the Euro
credit market are Euro banks,
American, Japanese, British, Swiss,
French, German and Asian (specially
that of Singapore) banks, Chemical
Bank, JP Morgan, Citicorp, Bankers
Trust, Chase Manhattan Bank, First
National Bank of Chicago, Barclay's
Bank, National Westminster, BNP, etc.
Among the borrowers, there are banks,
multinational groups, public utilities,
government agencies, local authorities,
etc.
 EURO BOND MARKET

• The Eurobond market is the largest

international bond market, which is said to have
originated in 1963 with an issue of Eurodollar
bonds by Autostrade, an Italian borrower. The
market has since grown enormously in size and
was worth about $ 428 billion in 1994.
 
• Eurobond markets in all currencies except the
Japanese Yen are quite free from any
regulation by the respective governments.
 
• Floatation costs of the Eurobond are
comparatively higher than costs indicated with
 EURO DOLLAR
• Eurodollars are deposits denominated in
US dollars at banks outside the United
States, and thus are not under the
jurisdiction of the Federal Reserve.
Consequently, such deposits are subject to
much less regulation than similar deposits
within the United States, allowing for higher
margins. There is nothing "European" about
Eurodollar deposits; a US dollar-
denominated deposit in Tokyo or Caracas
would likewise be deemed a Eurodollar
deposit. Neither is there any connection
with the euro currency. Typically the term is
only used for US dollars in European banks,
The money market in which euro
currency held in bank outside of the
country, where it is legal tender is
borrowed and let by banks in europe.
 FEATURES OF EURO
CURRENCY MARKET
• Since a bank outside the domestic
country does not obey the domestic
financial regulation and pay any tax
to the domestic country
• Because of the same reason the
lending rate is also lower than in the
domestic country’
• Short term financial market
• LIBOR
 4 SEGMENTS OF EURO
CURRENCY MARKET
• Euro credit market

• Eurobond market

• Eurocurrency market

• Euronote market
 EURO DEPOSIT
• The equivalent of a money market rate on
cash deposits made in the euro currency.
Euro deposit rates will usually be quoted as
"money market euro deposit rates" and are
typically only offered to U.S. investors with
minimum investments of greater than
10,000 euros.
• Euro deposits pay a floating interest rate
(like a money market account) and offer the
chance for capital appreciation if the euro
appreciates against the investor's home
currency (presumably the dollar).
• Euro deposit rates are based on the euro
interbank offer rate, which is set by
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