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Quarterly Bulletin
Europe Articles

Spring 2002 Equity wealth and consumption-the experience of Germany, France and Italy in an international context
(108k)
(by Ben Norman, Maria Sebastia-Barriel and Olaf Weeken of the Bank's International Economic Analysis Division). Consumption in Germany, France and Italy (the EU3) has generally been thought to be less responsive to wealth effects than in the United Kingdom or the United States. The aim of this article is to assess the evidence for changes in the responsiveness of EU3 consumption to changes in equity prices, given the rapid increase in share prices in recent years and the rising share of financial assets held in equities during the 1990s.
May 1998 Competition and co-operation: developments in cross-border securities settlement and derivatives clearing (63k)
(by Bob Hills and Chris Young of the Bank's Payment and Settlement Policy Division). European securities settlement systems and derivatives clearing houses are preparing for EMU by offering members clearing and settlement services in foreign as well as domestic instruments. This article outlines recent developments and new initiatives in cross-border securities settlement and derivatives clearing. It suggests that competition for post-EMU business is already resulting in increased co-operation, in the form of links between systems. These developments have implications for the risks in cross-border clearing and settlement and for market structure, and raise issues for central banks and regulators.
November 1997

Rationalisation of European equity and derivative exchanges (42k)
(by Claire Williamson of the Bank's Markets and Trading Systems Division). This article outlines recent structural changes in EU equity and derivative markets, and some of the main factors underlying the increasing trading links between exchanges, both within countries and across borders. It concludes that such links are likely to continue to prove attractive, and notes that this raises a number of issues for market participants, exchanges and regulators.

Implied exchange rate correlations and market perceptions of European Monetary Union (185k)
(by Creon Butler and Neil Cooper of the Bank's Monetary Instruments and Markets Division). A number of 'EMU calculators' have been developed to assess market expectations of the likelihood of particular countries joining European Monetary Union (EMU). Most of these techniques attempt to infer this information from interest rate differentials. Typically they also require assumptions about the level of interest rates that would hold should a country not join EMU. This article discusses an alternative measure of EMU convergence - the expected correlation between currencies implicit in foreign exchange options prices. It shows how implied correlations may be calculated, and how they may be used to gauge expectations of EMU participation by continental European countries and to interpret sterling's movements since mid 1996.

May 1997

Comparing the monetary transmission mechanism in France, Germany and the United Kingdom: some issues and results (142k)
(by Erik Britton and John Whitley of the Bank's Conjunctural Assessment and Projections Division). In this article, Erik Britton and John Whitley analyse the importance of structural differences between the economies of the United Kingdom, France and Germany for the response of output and prices to changes in monetary policy. They review previous studies and report results from a complementary empirical approach, summarising the evidence as inconclusive. They argue that some of the commonly cited differences are not really structural and that even where they are, they do not automatically imply that one economy will be more sensitive than another to a change in monetary policy.

Executive summary of the single monetary policy in Stage 3 (15k)
This is a summary published by the European Monetary Institute (EMI) of its report on the alternative strategies for conduct of a single monetary policy by the European System of Central Banks (ESCB) in Stage 3 of Monetary Union. This follows the article in the previous edition of the Quarterly Bulletin which gave the Bank's views on the EMI's proposals for the operational framework.

February 1997 Monetary policy implementation in EMU-a Bank of England perspective on the EMI's proposals (32k)
(by David Rule of the Bank's Gilt-Edged and Money Markets Division). This article summarises and explains the European Monetary Institute's (EMI) proposed operational framework for the European System of Central Banks (ESCB) to conduct a single monetary policy in Stage 3 of Economic and Monetary Union (EMU). The framework would apply in the United Kingdom from 1 January 1999 if the United Kingdom fulfilled the necessary conditions to adopt the euro and the UK Government and Parliament decided to move to Stage 3. The article sets out the areas where agreement has been reached between EU central banks and gives the Bank of England's views on the issues that remain to be settled by the European Central Bank (ECB) after it becomes operational.
August 1996 Practical issues arising from the single currency (30k)
The Bank intends to publish a broadly quarterly series of papers as part of its efforts to ensure that the practical issues arising from the single currency, whether the United Kingdom is inside or outside the euro area, are fully understood and appropriate action is taken. This paper was originally prepared for the House of Commons' Select Committee on the Treasury, and subsequently made publicly available on 10 May. It reports the outcome of the Bank's discussions with banking and other sectors in the United Kingdom in the period up to May.
February 1996 Changeover to the single currency (16k)
(by John Townend, a Deputy Director of the Bank).
The European Monetary Institute document on the introduction of a single European currency is set in a UK context, with an account of the Bank's actions.
November 1994

Regulating investment business in the Single Market (39k)
(by Professor Richard Dale) examines the regulatory framework for investment business put in place by the Capital Adequacy and other Directives, focusing on the attempt to establish a level playing-field for banks and other financial institutions. The article is the second in an occasional series - begun in the May Bulletin - of pieces by contributors from outside the Bank.

The developing Single Market in financial services (27k)
summarises the views, outlined in discussions with the Bank, of a range of financial sector firms on the development to date of the Single Market in that sector.

August 1994 UK trade-long-term trends and recent developments (54k)
(by Andrew Dumble of the Bank's Structural Economic Analysis Division) considers why trade performance matters. It analyses the factors that determine whether a current account deficit gives grounds for concern, and considers some longer-term trends in UK trade performance. It then assesses the impact of two major influences on recent UK performance - sterling's depreciation following the suspension of ERM membership and the recession that has affected its main EU trading partners - and suggests some elements in the short-term outlook.
February 1994 The role of the European Monetary Institute outlines the functions and organization of the EMI, which began operations on 1 January.

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