Basket weaving: the euromarket experience with basket currency bonds

ECU-denominated international bonds owed much of their limited success in the 1980s and 1990s to restrictions on the internationalisation of the Deutsche mark and to speculative investment, rather than simply to the benefits of diversification. Basket bond issuance may come at the cost of a less liquid domestic bond market.

JEL classification: E42, E58, F02, F31, F33, F36, G15.