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Shadow that euro

The European Central Bank's governing council might not be meeting yet, but Deutsche Bank - who else? - has the inside track. For about six months its leading economists in 10 locations have been acting out a "shadow" ECB council which, in a monthly conference call, sets a shadow interest-rate policy for the euro.

"We knew interest rates after 1999 wouldn't be Bundesbank rates because the national central bank governors will have a bias in favour of their home country," says James Barty, Deutsche's director of European economics. So the economists each root for their home team. "Our French chap hardly ever wants to put rates up, as you might guess," he says, "while the Irish and others say 'if we don't put rates up we'll have a problem'."

By the way, it's expecting money market rates to converge on 3.8% by the year end. David Shirreff

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