Around 1986, signs of “financial anomaly” emerged, brought about by the innovations associated with Financial Liberalization. The most notable anomaly was the apparent no-risk arbitrage opportunity for large non-financial corporations. In 1985, banks became allowed to offer large time deposits with no regulation on their rates.
These are indeed relevant questions, even if the issuance of euro cash still continues to grow. This seminar aims to contribute to the contemporary debate and increase our understanding of these questions. Against this background, let me focus on three topics that the central banks must in my view carefully analyse. 1.