Euro and the Dollar Analytical Essay by scribbler

A look at the banking at the Eurosystem.
# 151876 | 844 words | 1 source | APA | 2012 | US


$19.95 Buy and instantly download this paper now

Description:

This short paper clearly describes several banking relationships involved in maintaining the stability of the Euro. First, the paper discusses the Eurosystem, which is the central banking system of the countries that come under the European Union. In particular, the paper notes the cooperation between national banks and the Eurosystem. Next, the paper highlights why the Eurosystem was established and the bodies involved in implementing and maintaining its monetary policies. Then, the paper explores the relationship between the Euro and the US dollar. The paper concludes by stating that in the long run the use of Euro will increase and it will slowly and gradually eat into the share of US dollar in international trade.

Outline:

Eurosystem and ECB
Euro and the US Dollar

From the Paper:

"The US dollar has been the preferred currency in international trade for the last fifty years. It replaced Pound Sterling as the most important currency in the world. In general, the basis for determining a currency for international trade is based on five factors and they are the size of the economy, importance in the international trade, openness of the domestic market, ease of convertibility and the macroeconomic policies of the country (Pollard, 2001). Based on these factors, the US dollar was used in all international transactions.
"The introduction of Euro on January 1st, 1999 changed the face of international trade. It became a big competitor for the US dollar and the importance of Euro grew in international trade. In 1999, the economies of United States and Euro Area were 21.9% and 15.8% respectively while the share of world exports for the Euro was 19.4% and it was 15.3% for the US dollar. One of the major reasons for this increase was the adoption of Euro by the countries in the euro area. This change brought about great financial benefits for the countries in the euro area in the form of reduced transaction costs and lowered exchange rate risk."

Sample of Sources Used:

  • Pollard, Patricia. S. (September/October, 2001). The Creation of the Euro and the Role of the Dollar in International Markets. Publisher: Federal Reserve Bank of St. Louis.

Cite this Analytical Essay:

APA Format

Euro and the Dollar (2012, October 19) Retrieved November 22, 2019, from https://www.academon.com/analytical-essay/euro-and-the-dollar-151876/

MLA Format

"Euro and the Dollar" 19 October 2012. Web. 22 November. 2019. <https://www.academon.com/analytical-essay/euro-and-the-dollar-151876/>

Comments