TY  - JOUR
AU  - Levich,Richard M.
TI  - Developing the ECU Markets:  Perspectives on Financial Innovation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2276
PY  - 1989
Y2  - April 1989
UR  - http://www.nber.org/papers/w2276
L1  - http://www.nber.org/papers/w2276.pdf
N1  - Author contact info:
Richard M. Levich
Stern School of Business
New York University
44 West 4th Street
New York, NY 10012
Tel: 212/998-0422
Fax: 212/995-4256
E-Mail: RLEVICH@STERN.NYU.EDU
AB  - The European Currency Unit (ECU) was officially introduced in March 1979 and has joined the ranks of innovative financial products that are rapidly appearing. The purpose of the paper is to explore the properties of the ECU and analyze those characteristics of the ECU, and products denominated in ECU, that offer value-added. Changes in communications and information technology, changes in the regulatory climate, and changes in the macroeconomic environment have generally encouraged recent financial innovations. We argue that the ECU has gained an edge on its component currencies because of its portfolio properties, its role in reducing transaction costs, the role of the European Monetary System, and trading factors peculiar to the ECU. Private participants should continue to gravitate toward the ECU as a useful vehicle to fulfill the services of money.
ER  -