3. Euro Market
• It is a large market comprising many member nations of EU
• It facilitates the free movement of goods and services
• In other words efficient trade mechanisms such as low tariffs, quotas etc.
and have a centralized monetary policy
• Using a common currency - Euro (Most of them)
• The euro market acts as a major source for international trade
4. More about EM
• Single market for EU
• The European commission describes the single market as "one territory
without any internal borders or other regulatory obstacles to the free
movement of goods and services."
• Free flow of goods and services
• Intended to improve efficiency, stimulate trade and help growth etc.
– (Deeper economic integration)
• Eurozone / Euro Area
5.
6. A euromarket can be used to describe the
financial market for Eurocurrencies
8. • Eurocurrency is currency deposited by national governments
or corporations, outside of its home market. Commonly it is currency held
in banks located outside of the country which issues the currency.
• For example, a US dollar denominated deposit in a Singapore bank is
Eurocurrency
• It is accumulated in European banks that deal in other currencies such as
American dollar, Japanese Yen, Swiss Francs, etc.
Euro Currency
9. Euro Bank
• A Eurobank is a financial institution that accepts foreign currency
denominated deposits and makes foreign currency loans.
• Eurobank does not necessarily have to be located on the continent of
Europe; it can be anywhere in the world.
• For example, a bank located in the United States that extends loans or
holds deposits in Japanese yen is a Eurobank.
10. Eurocurrency Market
• The Eurocurrency market consists of Euro Banks that accepts deposits and
offers credit in foreign currencies.
• Eurocurrency refers to a currency that is freely convertible and is deposited
in a bank present in a country where the currency is non-domestic.
• The bank can be either a foreign bank or a foreign branch of a domestic
bank
11. Features about Euro Market
• International Market
• Independent Market
• Wholesale Market
• Competitive Market
• Short term market
• Inter-Bank Market
12. Features of Euro-currency market
1. International Market
The Euro-currency market is an international market which accepts
deposits and gives credit in currencies from throughout the world.
2. Independent Market
It is a free and independent market which does not function under the
control of any monetary authority.
3. Wholesale Market
– It is a wholesale market in which different currencies are bought and
sold usually above $ 1 million.
13. Contd..
4. Competitive Market
– It is a highly competitive market in which the supply and demand for
currencies depends on interest rate changes of Euro-banks.
5. Short-Term Market
– It is a short-term money market in which deposits in different
currencies are usually accepted for a period ranging from a few days to
a year and interest is paid on them.
6. Inter-Bank Market
– It is an inter-bank market in which the Euro-banks borrow and lend
dollars and other Euro-currencies from each other.
