ABSTRACT
The Euromarkets are thought to be cheaper and more efficient than their competing national money and credit markets, and for obvious reasons. The national money and credit markets are controlled: central banks fix the interest rates and refinancing costs of "their" domestic commercial banks, and via their domestic liquidity policy regulate the credit-creating multiplier. The credit creation of the Euromarkets operating on the international scene thus emancipated itself from its source of primary dollar liquidity. The Euromarkets obviously have become a far more powerful inflationary mechanism than the Bretton Woods system in its late phase. The credit-creating multiplier of the Euromarkets does not depend on individual credit demand but on the credit-creating capacity available to, or rather retained by, all credit grantors. Without access to real and financial foreign capital the external financing of a much needed domestic development and restructuring process would have had to be broken off midway.
