(2017), “The international dimension of the ECB’s asset purchase programme”, speech at the  ECB’s Foreign Exchange Contact Group meeting, Frankfurt am Main, 11 July. 3 See e.g. Fratzscher et al. (2016, op.cit.) and Georgiadis, G. and J. Gräb (2016, op.cit.). 4 See e.g. Gabaix, X. and M. Maggiori (2015), “International Liquidity and Exchange Rate Dynamics,” Quarterly  Journal of Economics, 130(3), pp. 1369-1420; and Hau, H. and H. Rey (2004), “Can Portfolio Rebalancing Explain the Dynamics of Equity Returns, Equity Flows, and Exchange Rates?”, American Economic Review, 94, pp. 126-133. 5 See e.g. Engel, C. and K.D. West (2005), “Exchange Rates and Fundamentals”, Journal of Political Economy,  vol. 113(3), pp. 485-517; Froot, K.A. and T. Ramadorai (2005), “Currency Returns, Intrinsic Value, and Institutional-Investor Flows”, Journal of Finance, 60, pp. 1535-1566; and Engel, C. and K. West (2010), “Global Interest Rates, Currency Returns, and the Real Value of the Dollar”, American Economic Review, 100, pp. 562567. 6 A second explanation could be that exogenous monetary policy shocks may have less impact on long-term  interest rates (see e.g. Evans, C.L. and D.A. Marshall (1998), “Monetary Policy and the Term Structure of Nominal Interest Rates: Evidence and Theory”, Carnegie Rochester Series on Public Policy, 49, 1998, pp. 53– 111). 7 For more details on estimates of US term premia, see e.g. Adrian, T., R. Crump and E. Moench (2013), “Pricing  the Term Structure with Linear Regressions”, Journal of Financial Economics, 110, pp. 110-138.
The City of London has been making a positive and constructive contribution to their development by doing what it does best: providing a lead through innovation; and setting the standard for excellence. As a result, all the available evidence continues to indicate that, since the launch of the euro, London has fully maintained its market share. Let me give you a few figures. •  There are 482 foreign banking institutions in London, around double the number in Frankfurt, and more than double the number in Paris. •  The wholesale euro payment system in London, CHAPS euro, has recently accounted for 19% by value of cross-border payment flows in TARGET, the pan-European payment system. This figure has grown from 15% since the launch of the euro, and the UK now accounts for more crossborder payment flows in euro than any other country, except for Germany, even though the UK is not participating in EMU. •  London is estimated to have a 32% share of global foreign exchange turnover, compared with 5% for Germany and 4% for France. •  London's global market share of over-the-counter derivatives is around 35%, compared with 5% for Germany and 6% for France. •  Over 98% of the euro short-term interest rate contracts on the three major European derivatives exchanges (in London, Frankfurt and Paris) are traded on LIFFE.