Global Financing and Exchange Rate Mechanisms

Global Financing and Exchange Rate Mechanisms

Euro Currency is the currency of the European Union. The European Union (EU) is a union of independent states based on the European Communities and founded to enhance political, economic and social co-operation. The European Union is formerly known as European Community (EC) or European Economic Community (EEC). The European Union has 25 member states, an area of 3,892,685 km and approximately 460 million EU citizens as of December 2004. If it were a country, it would be the seventh largest in the world by area and the third largest by population after China and India. The European Union has land borders with 20 nations and sea borders with 31. As per European commission Euro currency, the euro is the single currency shared by 15 of the European Union's Member States, which together make up the euro area. The introduction of the euro in 1999 was a major step in European integration.

The major benefits of the Euro currency is the sharing a common Euro currency which is enabling the simpler and less expensive inter-nation trading. The common currency also enables less fluctuations and lesser risk. In Global terms the US Dollar is the leading currency and now the Euro is the second most important with the Sterling British Pound third. When the euro came into being, monetary policy became the responsibility of the independent European Central Bank (ECB), which was created for that purpose, and the national central banks of the Member States having adopted the euro. Together they compose the Euro system. Hence ECB is monitoring the Euro currency with the guidance of all the EU members.

International financial markets play a crucial role in global business. Business firms face many opportunities and threats from monetary systems and financial/capital markets. Organizations might issue securities in euro currency, because it will enable the companies to avoid a variety of monetary authority...