Global Central Bank Focus

Currency and QE: Ramifications of Questioning the Euro

The risk of redenomination, remote as it is, still complicates the European Central Bank’s exit from quantitative easing.

What is the future of the eurozone’s common currency? As remote as it is, redenomination risk is back: Political developments have some countries reassessing the euro. And while we don’t believe the euro is facing an existential threat, just the presence of redenomination risk is enough to complicate the European Central Bank’s (ECB) exit from its quantitative easing (QE) programme.

The risk that the euro might not remain the