All this was seen necessary for the euro to become an international currency in its own right. In addition, many pointed to opportunities and needs for portfolio diversification. The launch of the euro took place in the wake of rapidly surging globalization. This beyond doubt facilitated the euro’s role in international foreign exchange and capital markets.
Over the past decade international trade has continued to grow. Perhaps more importantly, international capital flows have grown dramatically and the foreign exchange market turnover has continued to increase at an unpredictable pace. All this has coincided with large and persistent global imbalances, soaring foreign exchange reserves and rapidly growing Sovereign Wealth Funds.