Indeed, the new reality of
euromarkets and pressures from foreign governments over the trade surplus are destabilizing.
It was the initiatives of these two nations that produced the
Euromarkets and unleashed a process of competitive deregulation.
These alternatives arose in the government bond markets (developed to finance the rising deficits in those decades), the
Euromarkets, and in various nonbank activities.
Glasner notes that there has been nothing stopping banks already from issuing private currencies in the
euromarkets. They have chosen, however, to continue to denominate their transactions in existing national currencies, a choice that may give some indication of the likelihood of new private currencies being developed by the stored value device issuers.(49) Not only are existing national currencies more familiar, but various institutional frameworks--from clearing networks to legal provisions to lender-of-last-resort facilities--are specifically designed for their use.
During these years, finance was, however, gradually regaining its position both in domestic and international spheres (in particular in the development of
Euromarkets).
A note issuance facility is a financial tool used by a borrower to issue short-term securities in the
Euromarkets. Note issuance facilities can be differentiated from other short-term financing measures, such as commercial paper, by the underwriting commitment component.
Given the proliferation of
Euromarkets and other financial processes that are virtually impossible for individual governments to control, the reimposition of barriers to capital mobility seems most unlikely.(37) The integration of financial markets may yet be the death knell of social democracy.
(1991), 'Corporate finance in the
euromarkets and the economics of lntermediation',CEPR Discussion Paper 570.
In Europe, the major securitization so far has been the movement of customers in countries without strong indigenous securities industries to the
Euromarkets for Eurobond and Eurocommercial paper, plus the growth of the mutual funds industry in many countries.
To some extent, the distinction between banking and securities business has already become blurred, as Japanese banks have set up securities subsidiaries in the
Euromarkets and foreign banks have engaged in securities business in Japan.
But over an extended period, rather than as an isolated incident, such treatment will not foster stable international transactions, or the sustained predominance of the dollar in
Euromarkets.
