The flow of corporate euro bond and equity issuance has grown significantly, though it is important to keep this in proportion: the stock of issuance outstanding in both cases is still - by some margin - lower than the US. (Domestic debt securities in the euro area, taking governments and corporates together, amount to the equivalent of around $ trillion, compared with some $ trillion in the US. And the equity market capitalisation of companies in the euro area amounts to the equivalent of around $ trillion, compared with some $ trillion in the US.) Since the launch of the euro, the focus of risk assessment in the corporate debt market has shifted from currency risk towards credit and liquidity risk. A growing number of companies in the euro area have been seeking external credit ratings. And an equity culture is beginning to take root in the euro area, despite the volatility in TMT stocks over the past two years. In Europe as a whole, for example, there were over 17,000 M&A transactions with a combined value equivalent to $ trillion last year. The second change concerns the integration of euro trading and settlement. Trading has increased in most euro markets, and dealing spreads have narrowed. Electronic trading and communication  2  BIS Review 11/2001  networks have greatly increased the reach of traditional financial markets, while allowing new providers to enter at relatively low cost.
David Clementi: The City and the Euro: innovation and excellence Speech by Mr David Clementi, Deputy Governor of the Bank of England, at the City Seminar on 'London into the 21st Century' at the Palace Hotel, Tokyo on 13 February 2001. *  *  *  Introduction The City of London is, and always has been, a centre of innovation and excellence. I want to talk to you today about the City's role in the euro markets as an example of how London proposes to maintain its standing and reputation for innovation and excellence in the 21st century. For me, it is a great pleasure to be able to talk to you about this here in Tokyo. There are historic links between Tokyo and the City of London, and I am glad that these links are continuing to flourish. We welcome the fact that so many important Japanese financial institutions are represented in London; and, of course, that UK-based financial institutions have operations here in Tokyo. It is not surprising that there are such strong links between Tokyo and the City of London, because London is one of the three global financial centres, alongside Tokyo itself and New York. Tokyo and New York are global centres because of their large domestic markets. Unlike Tokyo and New York, London's primary focus is international. London is much the largest international financial centre in Europe. Historically, London developed as a financial centre because of the international role of the pound sterling.