Many banks have been forced out of Euro-commercial paper recently. With margins thin, large volumes are a prerequisite of profit. The prospect of European monetary union has, however, led to rapid market growth. This year SBC Warburg managed to raise market share to 27% of total outstandings. SBC Warburg attributes much of its success to the use of electronic trading in its spot and forward foreign exchange operations, which in turn has enhanced its capabilities in synthetic Euro-commercial paper.
A diverse commercial paper capability is important because it is the cheapest way to raise funds across currencies.
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