EU discusses integrating dollar holdings... "Preparing for Trump administration risk"

European Union (EU) financial authorities are reportedly discussing a plan to centrally manage dollar assets held by offshore central banks. It is interpreted that concerns have arisen that under the Trump administration the dollar could be used as a political tool or access could be restricted in a crisis.

On the 13th (local time), according to economic news channel Walter Bloomberg, EU officials are reviewing various options to jointly manage or consolidate the dollar holdings held by countries outside the United States. This is to secure safeguards to respond to foreign exchange market volatility and geopolitical risk.

Within the EU there has been ongoing discussion that dependence on the dollar should be reduced and the structure of foreign exchange reserves diversified. As the Trump administration has recently hinted at strengthening export controls on China and the possibility of expanding sanctions, the risk to dollar access has re-emerged.

Future discussions are expected to continue mainly through meetings of finance ministers and the European Central Bank (ECB) consultative body.