Waking up to the nightmare: Winners and losers after EMU
| Pages | 249-252 |
| DOI | https://doi.org/10.1108/eb024975 |
| Date | 01 March 1998 |
| Published date | 01 March 1998 |
| Author | John L. Langton |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 6 Number 3
Waking up to the nightmare:
Winners and losers after EMU
John L. Langton
Received: 30th April, 1998
International Securities Market Association, Rigistrasse 60, PO Box, CH-8033 Zurich, Switzerland;
tel:
(
+ 41)1 363 42 22; fax: ( + 41)1 363 77 72
John L Langton has been Chief Executive
and Secretary General of the International
Securities Market Association (ISMA)
since 1990. He is also Chairman of ISMA's
wholly-owned London subsidiary, ISMA
Limited. He has more than 30 years'
experience in the international securities
market. Immediately prior to taking over
as Chief Executive and Secretary General
of ISMA he was Managing Director of
Gintel & Co Limited, London and before
that he held the position of Senior Execu-
tive Director of Orion Royal Bank Limited.
He holds a number of other senior
posi-
tions. Since 1994 he has been Vice
Chair-
man of the Madrid-based European
Capital Markets Institute (ECMI), and since
1996 he has been a member of the govern-
ing council of the Centre for the Study of
Financial Innovation (CSFI), based in
London. In 1997, he also became a
member of the board of the Emerging
Mar-
kets Clearing Corporation (EMCC), New
York.
ABSTRACT
In this paper, the author examines how fund
management is destined to be the largest source
of growth in investment assets once the Eur-
opean single
currency
is introduced.
The removal of
currency
costs and currency
risks in the
conduct
of
cross-border
business will
improve investment flows within the euro zone
and generate an increase in investment assets
from
pension
funds.
The author warns that the introduction of
the
euro is likely to toughen
cross-border
competi-
tion between market intermediaries and
cause
a
reduction in costs, increasing the attractiveness
of trading and investing in Europe. The
removal of currency risk and convergence in
yields will
lead
fund managers to seek alterna-
tive ways to give their fund performance an
advantage over their competition.
INTRODUCTION
As this paper goes to print, some months
remain before the switchover to the Eur-
opean single currency becomes a reality.
The cross-border revolution is shortly to
descend upon the European financial ser-
vices industry.
From January 1999 cross-border transac-
tions are going to assume an even greater
importance to firms in Europe than those
undertaken between counterparties within
a single country. The final barriers — that
have been crumbling for some time —
between the so-called domestic and inter-
national debt markets are being erased.
The expression 'global marketplace' is
now, of course, part of everyday language
in financial circles, especially so in the
international securities market. Since the
Eurobond market began in the early 1960s,
it has depended for its existence on cross-
Journal of Financial Regulation
and Compliance, Vol. 6, No. 3,
1998,
pp. 249-252
Henry Stewart Publications.
1358-1988
Page 249
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