A widely expected impact of the European Monetary Union (EMU) concerns the use of the euro as a reserve currency and represents a challenge to the dollar as the world's dominant currency. It also opens the possibility for the creation of the world's largest domestic financial market in Europe. While a single currency is a necessary condition for the emergence of pan-European capital markets, it is, however, not a sufficient one. Several conditions have to be met and the evolution of world finance after EMU is likely to be characterized by multiple equilibria. This chapter reviews the first evidence in this question, after one year of EMU.