The Incomplete Currency

Foreword

This refined analysis on the European Monetary Union certainly cannot put an end to the controversies that inflame endless discussion on this big political and economic innovation. Nevertheless, this book has the merit to frame the problems not only in a perspective that is scientifically rigorous, but with an eye that is able to analyse all the consequences on the European and global financial systems. The “Incomplete Currency” is born and grows in an historical period during which the financial institutions and their activities are not only a support for the real economy but have become themselves an end.

Making money is the mantra that drives the behaviour of financial operations and maximises the market's efficiency. At the same time–in a completely impersonal mode–it encourages speculation and profit seeking from both good and bad news. This emerging phenomenon radically changes the equilibrium of power relations across the entire planet; moreover, as it emerges from the most recent analyses, it presents itself as a determining factor that governs the increasing disparities in wealth distribution.

As introductory topics, the book provides the reader with the tools of the trade. Key concepts–such as those of interest rate risk, credit risk, sovereign yield curve, public debt, inflation, interbank market, collateral, credit derivatives and arbitrage–are carefully explained, laying down the premises to the forthcoming analyses.

The salient features of the monetary policy ...