Private use of official currency cocktails: the relative success of the ECU and the SDR
Keywords:Currency cocktails, ECU, SDR, Wholesale banking, retail banking
Two currency cocktails that were first developed for government use, the European Currency Unit (ECU) and the Special Drawing Right (SDR), now have very active markets that have evolved to meet the needs of the private sector. Although the private use of both currency composites emerged in the wholesale banking market, currency cocktails are now also rapidly becoming important in the area of retail banking. The present work explores this recent phenomenon of private use of official currency cocktails. The author looks at the origins and composition of the ECU and SDR, their development in private markets and the reasons for their relative success.
JEL: G15, G21