Exchange rate risk

One of the advantages of the adoption of a common curency is the reduction of the risk associated with changes in currency exchange rates.It has been found that the introduction of the euro created "significant reductions in market risk exposures for nonfinancial firms both in and outside of Europe". These reductions in market risk "were concentrated in firms domiciled in the eurozone and in non-Euro firms with a high fraction of foreign sales or assets in Europe". These changes were however "statistically and economically small".