Those wishing to sell housing loans on the Swedish market must, however, accept offering loans in kronor for the time being if they are to meet anything other than sporadic interest. This restricts competition to those who really actively want to sell their products in Sweden. If we enter EMU, it will be a different matter. We can then borrow in euro without being exposed to an exchange risk and access to potential lenders will increase dramatically. Mainly as a result of the deregulations in the 1980s and 1990s and the ensuing increasing competition, the Swedish housing loan sector has been condensed to five companies, of which four are subsidiaries of banks and the fifth is state-owned. These five companies cover around 95% of the market (figure 2). As housing loans are very standardised products, it is natural that the price, i.e. the interest rate, will be a crucial factor in competition for customers. This means in turn that refinancing costs will be absolutely decisive for running a profitable business. Market share for lending of major swedish banks end 1998. Per cent S E Bolån 10%  Venantius 2% Stadshypotek (inkl SHB Hyp) 32%  NB Hyp 12%  SBAB 14%  Spintab 29%  In the light of this, there is every reason to discuss what EMU and the euro can mean for the future financing opportunities and how Swedish businesses stand up to European competition?
In part, this no doubt reflects the fact that the euro is, for the moment, the new kid on the block which everyone wants to meet. But more fundamentally it is a clear vote of confidence in the new currency that such international interest should already be apparent in borrowing and investing in the euro, and in adapting and rebalancing portfolios to take account of this major change in the structure of the capital markets. A hugely important contribution to this process has, of course, been the vast exercise to prepare conventions, processes and systems for the euro, both within firms and in the shared market infrastructure. The scale of work undertaken in all centres – but notably in London, because of London’s pre-eminent position as the international centre for the bond markets – has been immense and I want to pay tribute to the high professionalism with which the preparations and the conversion itself were conducted. People commented on how empty the bars and restaurants were in the City of London over conversion weekend – which is remarkable in itself; but inside and indoors, 30,000 or more people achieved a remarkable feat of engineering, all within the space of a three-day holiday weekend. It may not have been everyone’s preferred way of spending New Year’s Eve, but it was certainly a very productive one. The good news is that everyone can come back and do it again this year for Y2K!