Traveling Naomi: A Lesson In German $

Day 10

We packed all the luggage onto the bus and said our sad last farewell to the Chateau de Portales that had been our home for the past nine days, and made our way to Frankfurt. In Frankfurt we had a presentation on the Deutsche Bundesbank, also known as the German Central Bank, and its role in the Euro Monetary System. In 1990 the euro was first introduced as electronic money only. Now 17 countries are included in the euro-zone. Being part of the Euro Monetary Union eliminates exchange risks, removes transaction costs, and increases competition. The drawback is that it leaves no possibility for national monetary and exchange rate policy, which creates conflict between common and national policy.

Criteria to be in the Euro Monetary System:

price stability
public budget position
exchange rate fluctuation
long-term interest rates

The Eurosystem is all central banks that have adopted the Euro, and the decision-making body is a governing council that meets bi-monthly with one vote/person and the president breaks a tie. Estonia is the most recent nation to join the Eurosystem. Nations can choose to withdraw from the euro, but they cannot be kicked out. Leaving the euro creates problems with the nation's credit rating and previous debts (would still be owed in the euro). The core activities of the Bundesbank include: cash management, financial and monetary systems, monetary policy, banking supervision, and cashless payments. After the presentation, we went downstairs to the euro museum, which was a lot like the tour I took of the Federal Reserve Bank in Atlanta last year...except European of course!

We were given some free time in Frankfurt to get lunch and explore the city after we left the bank. I of course ate a frankfurter! Then, a small group of us walked around to see the cathedral, window shop, and I even bought a couple of scarves a souvenirs. We met up with our new trip guide Jean to take us to our next stop in Frankfurt, the German Stock Exchange (DAX).

Much like the statue on wall street, there are statues of a bull and a bear outside of the DAX. The bull and the bear represent rises and falls in the stock market due to their fighting styles; the bull charges upwards with its horns while the bear slashed downwards with its paw. The Frankfurt Stock Exchange began in 1585. It conducts transactions like: trading, clearing, settlement, custody. Most employees work in IT securities. Equities were once printed by the exchange on paper, but they are now traded online because it cost 2-5 euros per document to print. There are 7 stock exchanges in Germany, and the DAX had 7400 points at the time of our presentation. The floor of the exchange used to be live like the one in New York City, but now it had all gone digital. The floor now consists of many people sitting at desks around huge banks of computers silently. The atmosphere of the stock exchange is much different than I pictured due to this difference.

At the end of the day, we all loaded back on to the bus headed for the hotel in Heidelberg, Germany where we would be for the next two nights. I arrived famished in Heidelberg and decided to go explore the downtown area with a group of friends. Unfortunately, everything in the city closes around 7, so finding somewhere to get dinner was proving to be a challenge. The only place open was a small corner restaurant called Asia Snack. Asian food in Germany seemed dubious, but we didn't have much of a choice. As it turns out, the owner of the restaurant could only speak German and Vietnamese, and a girl in our group named Jeanie was from Vietnam. The food was fantastic, and I ended up eating the best Pho of my life! After dinner, I took the train back with a friend and quickly fell asleep, eager for our first full day in Heidelberg.

Peace, Love, and Delicious Pho ~ Naomi

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