[fauigerzigerk]

Absolutely, but if an institution is taking some form of deposit in euros and promises to make predictable payments in euros then being long euros is not a directional bet for that institution.

Of course the picture gets a little murkier once you start considering inflation caused by exchange rate fluctuations. But that is probably not the main concern in a large currency area with an independent central bank.

[cinquemb]

We must have different ideas of what fx fluctuations are, +/-500 bps over a decade sure… not +/-500bps on -30% decline line over a decade vs a major pair…