Europe Finance, Finance Europe

By: EconomyWatch   Date: 29 June 2010

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Europe finance, or finance in Europe, includes the forex, stock and commodities markets across 48 states.While the Western European states have typically recoded high GDP figures, the Eastern European states are yet to recuperate from the fallout of the former Soviet Union and former Yugoslavia. The European Union (EU), which unifies 27 states, hassurpassed the US as the world’s largest economy, in purchasing power parity-based GDP (2008 data released by the IMF). As the first continent to industrialize, Europe was the world’s richest regions, and even though its share of world GDP has been declining, it still contributes four nations of the G7. Germany’s economy is the strongest in Europe, followed by that of France and the United Kingdom (UK).

Europe Finance: Currency

The official currency of the European Union (EU) is the Euro. Out of the 27 member states of the EU, 16 states (Austria, Belgium, Finland, Cyprus, France, Ireland, Germany, Italy, Greece, Luxembourg, Portugal, Malta, the Netherlands, Slovakia, Slovenia and Spain) have adopted the Euro as their domestic currency. Apart from the Eurozone, five other European countries have voluntarily adopted the Euro. Euro is the currency with the highest monetaryvalue in circulation, exceeding €751 billion in November 2008. The remaining European countries have their own national currencies.

The Euro is issued by the European Central Bank (ECB) and the Eurosystem, which comprises of the central banks of the various Eurozone countries. The currency is now being used to peg several non-EU currencies, such as the Bosnia and Herzegovina convertible mark, Cape Verdean escudo, the CFP franc, the CFA franc and the Comorian franc.

Europe Finance: Stock Market

Europe has several exchanges for trading stocks and their derivatives. Many of these bourses are among thetop 15 exchanges by value of shares traded. Some of the popular stock markets in the continent and their position in the world stock market are (daily trade as of 2007):

  • London Stock Exchange (LSE) - holds the third position, with stock trading amounting to $4,325 billion.

  • Euronext - holds the fifth position, with $5,640 billion worth of stocks traded.

  • Frankfurt Stock Exchange - holds the sixth position, with $4,325 billion worth of stocks traded.

  • Spanish Exchanges (BME) – holds the eighth position, with $2,970 billion worth of stocks traded.

  • Italian Stock Exchange – holds the ninth position, with stock trading amounting to $2,313 billion.

  • Swiss Stock Exchange (SWX) – holds the 13th position, with $1,886 billion worth of stocks traded.

  • Nordic Exchanges (OMX) - holds the 14th position, with total stock trading amounting to $1,865 billion.

Deutsche Börse operates the world's largest exchange network.

Europe Finance: Commodity

Europe has several commodity exchanges, of which the key ones are the London Metal Exchange (LME), London International Financial Futures and Options Exchange (LIFFE), NYSE Euronext, European Climate Exchange, Climex and Risk Management Exchange. The NYSE Euronext was formed by the merger of US-based NYSE and Euronext.

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