women spyder jacket The Contribution of the Euro-d

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The Contribution of the Euro-dollar Market to the Modern Financial World
The Euro-dollar market* had caused many changes to the modern financial world in which, the open competitive effect of the international money market caused the liberalization by almost all industrialized countries of domestic money and banking markets. The market acted as a fully international mechanism for attracting deposits and offering loans, over a broad scope of maturities and at highly competitive rates. The first important development of Euro-dollar business came after the Second World War, when Soviet bloc holders of dollar balances wanted to keep them in a form not subject to control by the US authorities. They kept them with London banks. However, the development of the market as a large-scale international structure truly dates from 1957. It was given its impetus then by a rise in UK Bank rate to 7% and the imposition of restrictions on sterling credits to finance trade between non-sterling countries. At that time, banks in the US were limited (by Regulation Q) as to the amount of interest they might disburse on deposits. Banks outside the US were able to offer a higher rate for dollar deposits, and yet, by operating on finer margins, to offer competitive terms for dollar loans. Many banks were well placed to take advantage of this situation. This was because of their broad overseas connections, long experience of international business and variety of channels for production international loans. The first substantial development of the market took place in London, and London conducted many of the largest share of the business, which contributed considerable invisible income to the UK balance of payments.
The role of sterling has been a central point to the evolution of the Euro-dollar market. To the sense that, the control of sterling has not only been a central abstraction of British governments, but largely determined Britain��s tactics towards the international financial market. Since 1958, governments have found themselves in a ��dilemma�� by the pressures of which the international use of sterling had placed on the British economy where ��depleted�� reserves of the whole sterling area constituted the most premonitory constraint on achieving economy growth. The management of sterling was the heart of governing Britain until conditions allowed the convertibility of the currency in the late 1950s. The central point that, throughout the postwar period, the British government sought concerts that qualified US dollars to stream to Britain whilst limiting the convertibility of sterling in domestic and foreign hands, (the Washington Loan Agreement, the Marshall Plan, and military favour programmes encouraged a flow of dollars to Britain).
The UK government placed particular accent on exports to the dollar area (dollar-earning exports), with sterling area exports believed next in importance. As early as the 1950s, Conservative governments, set about reasserting the international status of sterling and the importance of the City of London as the world��s earliest financial centre. In 1953, commodity markets and exchanges for raw materials were re-opened in London. March 1954 saw the long awaited return of London Gold Market (open to all non-residents of the sterling area). Changes were made in currency regulations in 1955, which allowed the partly convertability of the pound for non-sterling area residents and non-dollar area residents. This was emulated eventually by the full convertability of sterling in December 1958, and by the Bank of England��s determination in 1962 to cater low foreign exchange cover and allow non-residents to prop dollar balances with the Bank of England (accordingly signalling the beginning of the Euro-dollar market). Dollars could now be deposited with the Bank of England in an external list, thereby escaping US exchange regulations and acquiring a higher rate of interest than obtainable in the US. The intention here was well enumerated. London��s location as the cardinal financial centre would be re-established and the City would quickly become the world��s leading Euro-dollar market.
However, the real significance of the Euro-dollar market lay in the fact that it originally drew its funds from non-bank suppliers and afterward lent them to non-bank users, in which the established market was not dependent upon the existence on the America remaining in deficit. As, the market presently become an integrated international money market providing its own specialised service which had shown considerable powers of survival. Merchant banks simply turned to the expatriate dollars, and used them in the way they have used sterling, operating freely on a global scale in the financing of international trade and the arrangement of longer term loans. American and other foreign banks ambitioning to take vantage of the paucity of financial controls in the UK soon joined this fashionable market that was dominated by the jobber banks. Hence, between 1967-1978 the representation of foreign banks in London grew from 113 to 395. As, for the City��s banks, the establishment of sterling convertability in 1958 ��was arguably the most important accident of this century��, for it heralded the rise of the London Euro-dollar market. The chart below shows how dramatic the Euro-dollar market had absolutely chance. A absolute of 91 international Euro-currency issues totalling the equivalent of $1,884m took place in 1967. The firms shown below are ranked in order of the amount amount of issues for which they acted either as managers or as co-managers. Apart from those listed, there were 45 firms active in such management .
Euro-dollar Bond League
Firm - Total Dollar Equivalents (000)- Number of Issues:
Banque de Paris et des Pays-Bas - 490,000 - 21
Banca Commerciale Italiana - 445,000 - 19
S.G. Warburg & Co - 385,700 - 21
Deutsche Bank A.G. - 367,500 - 17
Kuhn, Loeb & Co - 295,000 - 15
White Weld &Co - 285,200 - 14
Lazard Freres & Co - 265,000 - 14
N.M. Rothschild & Sons - 260,000 - 11
Morgan & Cie International S.A. - 260,000 - 8
Lehman Brothers - 250,000 - 9
Banca Nazionale del Lavoro - 194,000 - 9
First Boston Corporation - 168,000 - 8
Banque Nationale de Paris - 152,500 - 6
Societe Generale de Banque - 135,000 - 7
Amsterdam-Rotterdam Bank N.V. - 135,000 - 6
Credit Commercial de France - 131,200 - 7
Kredietbank - 130,200 - 9
Smith, Barney & Co Inc. - 130,000 - 8
Societe Generale - 125,000 - 5
Credit Lyonnais - 122,200 - 5
(Source: The Times, the Euro-dollar bond league 29 December 1967)
The City of London proved to be a extremely successful international commercial banking and financial centre, despite growing alarms of tournament from other centres. It presented strength, derived largely from the generalised ��trust�� with which the world views the City. The survival and revival of London as an international financial centre behind the disruptions of the Second World War and the weakness of sterling as an international reserve currency had been largely based upon the development of the Euro-currency markets. In specific the growth of new or ��parallel�� markets beside the age ��classic�� discount market, which with the relating decline of sterling as an international currency, had become a domestic concern. These new markets had revitalised the foreign exchange markets in feedback to the emergence of barriers of assorted varieties between final borrowers and lenders. On the one hand, the domestic parallel money market in sterling evolved out of responses which were planned to evade the credit restrictions which consecutive British governments had attempted to levy during the 1960s through their participation in the age deduct market. On the other hand, the decline of sterling and the difficulties associated with the US governments�� restrictions on the use of the dollar as an international currency gave rise to new markets in Euro-dollars and other Euro-currencies. New money markets where money is lent and borrowed between banks, companies and other organisations without the control of the financial authorities (governments and central banks). It was a measure of the City��s autonomy that such developments took place.
The development of the Euro-dollar Market can be described by using a Marxist thinking of capitalism, of special note, the workings of the capitalist economy and its political and social implications. In characteristic, to the theory of the state in progressive capitalism, and on the basis of the materialist conception of history and Marx��s general theory of capitalist production. As any attempt to develop a theory of the state, must deal with a Marx��s works on the state. In the sense that, capitalism is analysed predominantly as ��civil society��, as a just about self-contained sphere in which all inhabitants, including capitalists and operators, confront every other as competing individuals on the market. Using this conception, the state occupies dissimilar sphere standing outside civil society, which purports to represent universality or the community between human, but is often undermined by the incompatible individualism of its basis, namely civilian society.
Karl Marx alleged that, ��the preoccupation of the state as such belongs only to modern periods. The abstraction of the political state is a modern product�� . The Euro-dollar market inherently being a new phenomenon proved some uncertainty to the British Labour government during the mid-1960s, which had to approach the new market through an analysis of the world in which the Labour Party sought to govern. Such an analysis posed a kind of questions. Firstly, why particular institutions and processes posed such a set of problems for the individual Labour governments? Secondly, why particular issues come to preoccupy political argue in one period only for it to dwindle in importance in the next? Finally, why particular patterns of political and social cleavage prove so persevering? With such questions, and a new market formative, the British Labour Government had to respond with a set program in order to control specified targets including the series of booms and slumps, the differing strengths of the national economy, the rise and significance of multinational corporations, the role of international financial agencies, and the changing role of the government in economic and social life. Such a task seems a formidable one, but one that was not considered impossible. As what holds the analysis together is the admission that the world during the 1960s was capitalist to the sense that Marx used the term. The law of amount still manipulated throughout the major economic and social processes. Due to this reason,[link widoczny dla zalogowanych], the antecedent outline of Marx��s analysis remains pertinent, as it provides the means by which the true nature of the British government��s embarrassments can be unraveled and understood.
To Marx, the administrative of the modern state is portrayed for ��a committee for managing the prevalent businesses of the entire bourgeoisie��. However, there is a problem, which must confront any contemporary methodology of Marxism, namely the narration between exterior and reality. The state appears as neutral from the sphere of market exchange, yet in reality it is a different matter. The Euro-dollar is an sample of such a case, in marrow a phenomenon of the 1960s, an worldwide money market where commercial banks undertook wholesale transactions involving foreign currencies. It had been a growing market, which has often contained conflicts with the state. As governments alteration, the market had been growing by a quick pace, which had testified to be laborious to regulate. It seems that the Euro-dollar market was one of the initiating processes, which led to what is understood today as globalization. To the sense that, the market had occasioned many changes to the modern financial world which, evolved on a universal scale. The open competitive efficacy of the international money market had caused the liberalization by almost always industrialized countries of domestic money and banking markets. Where, successful participants in the money market of today, have a distant extra sophisticated knowing of financial hazard, and the tools to manage them. As the changes in the markets have necessitated many banking institutions to change in the direction of financial regulation.
However, when examining the Euro-dollar market, one has to turn to the 1960s which witnessed the focus of the changing relationship between the national state and the global financial markets, where the policies of Keynesian sought to bring ��economic forces�� under control. The idea was that the state should assume responsibility for the economy, intervening where the market fails to motivate economic growth. In times of a recession, the state should stimulate demand through deficit financing (such as, state disbursement based on credit). The state was thus charged with creating demand through an increase of the money afford. Keynesian raised these means to the conviction of capitalist forgery. Governments used these means in a form of expansionary policies. Keynesianism relied upon the use of money for expansive industrial development and the management of ��sound�� finance.
One major answer arose, throughout the paper: what are the risks and problems of the Euro-dollar market, and is the growth of this market a ��welcome tonic or a slow poison�� to the international financial system (with particular emphasis to the United Kingdom)?
There was no doubt namely the growth of the Euro-dollar mart had endowed spectacularly apt the easing of the earth liquidity problem. In fewer than a ten-year, the mart grew from nought to $13,000 million likened with one increase in lawful globe reserves of only $21,000 million from 1951 to 1965. However, the growth of this market merely ��put-off�� the evil day when the reserve money countries, and in particular the United States, had to accommodate their payout situations to the facts of life. On the technical class the growth in the Euro-dollar market exposed the world in general and Britain in particular to each similar dangers to those seasoned in the early thirties. Of its nature it was a market noteworthy for its lack of norm and control. No an country could discipline control over it. Euro-dollar deposits were no longer secondhand solely because trade finance, and hence were not self-cancelling. Although individual banks scrutinized limits to the value of dollars they were to loan to individual ��names��, countries alternatively areas, deposits passed through numerous hands ahead they had reached the ultimate user. It was nearly impossible to differentiate the amplitude to which whichever nation or individuals were committed to compensating Euro-dollars. If a serious malfunction happened anywhere in the system, the tug would be transmitted to the hub. Britain��s involvement in this market was so roomy with ��2,773 million liabilities and ��2,487 million credits, along 1968, that a breakdown would inevitably dart doubt aboard Sterling .
The risks and problems associated with the Euro-dollar market made themselves felt at three levels: the individual bank, the individual country, and at the level of the international financial system as a whole. For an individual bank the main risk was the feasibility that a borrower may not repay his Euro-dollar lend. The borrower for any number of purposes �C over which because of their unsecured nature, the lending bank had very little control, may use Euro-dollar funds. For an individual country, the problems created by the Euro-dollar market were two-fold: Firstly, the danger that the domestic banks involved in the market may over-extend themselves and thereby place demands on the official foreign exchange reserve. Secondly, the fact that the existence of the Euro-dollar market had provided another outlet through which short-term capital can flow internationally and, hence, had tended to increase the volume of short-term capital moving into or out of any particular country��.
There were difficulties in building a machinery that could bring about the essential degree of international control over the Euro-dollar market. The most important was the fact that there was no unattached institution, both citizen or international, that could control the market, and act as an international lender of final resort in the same way that a citizen chief bank tin in the case of a national money market. There seemed to be a system of informal understanding among the chief banks,[link widoczny dla zalogowanych], amplifying probably as part of their co-operation in fighting exchange emergency, beneath which substantial volumes of US dollars could be mobilised quickly to meet any serious destabilising forces in the Euro-dollar market. In circumstances where the absences of the Euro-dollar market did conflict with additional policy objectives, however, it was dubious the citizen central banks would give precedence to the Euro-dollar market. This was the elementary disability. As, in mandate to shirk this situation, the US dollar asset needed to stabilise the Euro-dollar market would have had to be made available on a more prim basis �C such as by means of pre-arranged swap and stand by preparations between the citizen central banks and the BIS. In this situation the BIS would be free to shriek on these swap funds in accordance with the needs of the Euro-dollar market. In addition, to meet these requirements during a duration of crisis the volume of US funds at the elimination of the BIS would have had to be substantial. Undoubtedly,[link widoczny dla zalogowanych], the major part of these swap funds had to originate from the Federal Reserve System.
Generally, however as far as the international financial system was cared, one listened nothing but nice of the Euro-dollar market and of its rapid expansion. Whitehall had generally greeted it as a means of financing the UK��s abroad order (investments) without putting undue strain on sterling. The City of London hardly created the market and had made a good handle of affair out of it. The Chancellor of the Exchequer stated way behind on the 8th December 1960, of using US dollars to improve the UK balance of payments, and to improve the UK dollar indebtedness. Throughout the end of the 1960s, it was perceptible that the Euro-dollar market not only financed the UK economy, but facilitated in the UK��s balance of payment��s problems. The British government foresaw the Euro-dollar Market as a way for advancing its own interests and concerns. The role of the public authorities and the nationalised industries proved to be very decisive to the UK government. These industries became a way for the UK government to raise foreign currency on a medium and long-term basis in order to finance its repayments of shorter-term debt and to improve the UK reserves. Both the Inland Revenue and the Treasury coincided on one entity that, something had to be done to ��helping local authorities to acquire access to the Euro-dollar market�� . To the sense that, either parties thought it desirable to embody a provision in the Finance Bill of 1970 to the effect that ��the interest on securities published by a local authority in the currency of a country outside the scheduled territories shall be payable in full without deduction of tariff at source,[link widoczny dla zalogowanych], and be exempt from earnings impose where the salutary owner of the securities is not resident in the UK��. This was the combined outlook of the Treasury and the Inland Revenue as a ��means of removing an impediment to foreign currency borrowing by UK authorities in the Eurobond market�� . The reason for this was that, ��it was in the public interest for nationalised industries and great local authorities to lend on the Euro-dollar market�� .
Controls in the UK had been devised to protect the reserves by restricting access to the market by UK residents and restricting of ��switching�� out of sterling by banks in the UK. UK residents who were proficient to show a need were allowed to nourish foreign currency deposits (which earned Euro-dollar rates) with UK banks. These deposits soon accrued dramatically. Also control was permitting UK residents (especially the local authorities) to borrow foreign currencies in this market,[link widoczny dla zalogowanych], or overseas where this allowed beneficial transactions to take place without recourse to the reserves (e.g. for foreign investment). Banks in the UK were allowed to maintain an excess of foreign currency claims over liabilities (i.e. to alternate out of sterling) only to the extent necessary for them to maintain working balances.
This would adjust a significant and profitable benefit to the UK balance of payments. The fancy was considered to be of such importance that large steps were taken to encourage UK borrowers to ��tap�� into the foreign currency sources of finance. The UK government passed powerful legislation through congress, which involved serious acute issues such as tax amounts encouraging foreign currency borrowing (i.e. tax allowances,[link widoczny dla zalogowanych], tax evasion, and payment of gross interest), and double taxation agreements.
However, decisive issues arose which showed the sensitivity of the situation of whether the UK government were favouring business interests, when pursuing its policies, and whether HM government would relieve these industries of the wastage should-ever there be a change in the exchange rates (in a fashion of a Government Exchange Guarantee). The dialectic creature that the government could not grant a nationalised industry to default and by encouraging the nationalised industries to borrow for the sole purpose of easing the balance of payments, the interest rates would be more than counter-balanced by the increased creation that would be made likely. Given successful management of claim, such making would either find its way into exports or into the satisfaction of needs, which would otherwise be placed into imports. This meant that external sources of capital financed a large part of the UK��s portfolio and straight investment abroad, and UK borrowers were allowed under exchange control to raise foreign currency loans to finance domestic investment. This was implemented by providing an ��off-shore�� regulation-free surroundings designed to trade financial assets denominated in foreign currencies.
One situation concerned the Ford Motor Company in the USA. The corporation had entered into a contract to buy for dollars, the sterling necessary to enable the enterprise to undertake their offer to buy 45% shareholdings in the Ford Motor Company of the UK, which they did not yet own. The UK Government on the 13th December 1960, received $370 million for value for this offer . Secondly, it was a market that even interested the IBRD. On 18th August 1960 Mr Miller of the IBRD��s Paris Office wrote to the UK Treasury, to consult with the Bank of England, the question of whether the International bank could follow the example that was apparent, with many other institutions providing dollars in the UK at short term, and to place these into what was identified as the ��Euro-Dollar Market��. At the end, the IBRD eventually dropped the idea of placing certain liquid dollar assets in London, because of the unfavourable opinion of the US Treasury. Although the IBRD resolved not to process this further, it nevertheless approximated the importance and relevance of the Euro-dollar market, and of the City of London itself .
In 1968, the progress in reducing the UK balance of payments deficit was much slower than the UK Government had either forecast or desired. As, the third 15 min figures of 1968 experienced an unprecedented net inflow of approximately ��200m on long-term capital account and a further decrement in the present account deficit. On the combined current and long-term capital accounts there was an identified surplus of approximately ��105m: the best quarterly outcome since the fourth quarter of 1966, and retinue deficits of about ��310m and ��170m in the first and second dwelling. Official long-term capital transactions benefited in the third quarter. There was a very large net inward action of private long-term capital amounting to around ��175m . However in 1969, there was a considerable turnaround between the first and second halves of the year, when the current and long-term capital deficit fell from ��427m to ��31m. Apart from the substantial progress in slitting the trade deficit, a significant part of the correction resulted from changes on the capital account. The outflow on official capital (in the capital account) inevitably rose. Bond issues overseas by UK public corporations provided a counterbalance to the increase. Tighter credit in the UK tended to check outward movements and encouraged inward movements of long and short-term capital. As investment of this kind involved no call on the UK reserves, in the standard form of the balance of payments, the investment was logged as a debit, but the Euro-dollars which financed it were logged not as a credit, but as a monetary inflow. In general, it seemed that there had been an encouraging start towards the UK achieving its momentary objective for 1969-70, and that the outlook in achieving a larger continuing surplus thereafter was good .
However even although it is simple to view these events by their own logic, in order to understand their real significance, they must be set in the environment of the negotiations which took place between Britain and Europe in the mid-1950s. In the summer and autumn of 1955, Britain was invited to discussions on closer European economic integration by the six nations, which finally signed the Treaties of Rome in March 1957. After a flurry of play in Whitehall, the Cabinet Office looped the Trend Report, which pointed out to 4 decisive considerations against membership . Firstly, the Cabinet Office and the Treasury had concluded that member would disable the UK��s economic and accordingly its political relationship with the Commonwealth and the colonies. Secondly, it was decided that the UK��s economic and political interests were worldwide and that a European common market would be inverse to the reach of freer trade and payments. Thirdly, it was thought that participation would gradually lead to political federation, which was unacceptable to Britain. Finally, the Cabinet Office concluded that membership would be noxious to the British economy since it would involve the removal of conservation for British industry against European competition. When placed alongside the earlier considerations relative to sterling, the Trend Report convinced the Eden government that Britain should retreat from the Messina Talks. Instead of negotiating with the Six, Thornecroft at the Board of Trade convinced the Cabinet to launch an alternative non-discriminatory scheme aiming to ��disunite�� the Six away from the idea of the common market. This contrive, labelled Plan G, later adult into Britain��s free trade propositions, which became the basis of the European Free Trade Area (EFTA) established after the Stockholm Conference in 1959 . Whilst, Plan G intended a free trade area designed to eradicate industrial tariffs, it carried no further implications regarding wider economic integration. Within a free trade area, Britain could retain its traditional trading building, and as Board of Trade concluded, this would be completely different from a European discriminatory bloc in which Britain came under domination of Germany.
The successful conclusion of the Treaty of Rome in March 1957, came as a major startle to the British state. It was fundamental to British calculating that the Six would not get cracking without the participation of the UK. In a honest memorandum titled ��What went bad?��, the Treasury scrutinized the scene in July 1959, and concluded that the government had made a number of serious errors . Britain had misunderstood the US position, not realising that the US State ministry would always back the Community given its political and defence implications. It had made a number of tactical mistakes, in trying to divide the Six, in believing that the UK would be allowed to join at any stage once the Community was formed and in failing to establish a ��negotiating machinery�� to mate that of the French. Finally the British government had proceeded to chase the half-hearted 17 country EFTA strategy when it was explicit that nor the French nor the Germans were attracted to the idea, which in any case the Treasury concluded ��does not bear exam for five minutes��. The next 14 years would be spent struggling with the legacy of the British state��s failed venture to discourage the production of the Community.
A further examination must make reference to the form of Britain��s postwar integration into international trade and money markets. Although a number of events began to weaken Britain��s position in the global political economy (Suez and the relentless process of decolonisation), access to privileged markets had enabled the economy to reconstruct and prosper in the early 1950s. Moreover, the British governments could utilise the international prestige of sterling and the City of London to counter, (at least in theory), the effects of balance of payments deficits. Once it became clear that, de Gaulle would not sanction UK entry to the Community, Britain was caught in a fasten and was forced to pin its economic wishes on the revival of the City of London.
In the 19th centenary, it was the competitiveness of ��British industry�� which led to the international use of sterling. However, by the late 1950s, the lack of competitiveness of Britain��s industrial found (particularly ��via�� Europe) immediately meant that the international use of sterling could quickly turn from an wealth to a liability. As sterling was made transformable, short-term chief inflows and outflows additional in volatility. In these circumstances, the Bank of England base it increasingly difficult to justify the exchange rate �C where the slightest ��rumour�� could guide to a heavy assumption against the pound, destabilising the domestic economy. Although these pressures were seen to exist even as early as 1956 (when sterling was only partially transformable) over the first 2 days of Britain��s invasion of Egypt there was a massive outflow of $50 million �C (they became more keen over the afterward 20 annuals). From the early 1960s, the ��British economy�� was prevailed by a pattern which watched rising levels of imports, falling exports, and when the poise of payments extra dwindled the presentation of tall interest rates to preoccupy short-term chief (hot money) to London.
On entering office in 1964, Wilson found that convertibility and the establishment of the Euro-dollar markets had produced a situation whereby financial markets could validate or disapprove of policy measures among hours. In many ways, the article of the Wilson��s government is one of speculative deed against the pound followed by international salvage operations to shore up the sterling exchange rate. Deflationary measures pursued throughout 1965, and 1966 failed to stem the tide of speculation, forcing the government to depreciate in November 1967 and to referee a $1,5 billion standby credit from the IMF. Wilson agreed with the Bank of England and the Treasury that devaluation was a strategy to be avoided unless the Labour Government was willing to devastate trust in sterling and the City as the premier financial centre.
So relatively, the development of the Euro-dollar market agreed with the recoveries of the capitalist economies and the growing pressure of the US economy. The deficit of dollars gradually changed into dollar saturation. This market took over aspects of a developed domestic credit system, which was operating globally and independently from the central banks. Speculative capital pretended the feature of national and international institutions, financing ration and balance of payments deficits. Such ��money�� existed as a claim on central bank money in national states on unregulated financial markets. The global role of the City foresaw the result as the dominance of financial over industrial capital. To the sense that though Britain was a low-wage and low-productivity country, it was a centre of global finance (due to the contribution of the Euro-dollar market). However, this did not mean that British industry had been undermined as a consequence of financial interests and policies favouring the concerns of financial markets, although the global role of the City ��has had�� a detrimental effect on British industrial development. Rather, the development of London as the centre for the global prevalence of capital expressed the organisation of ��British�� capital at the most developed level of global capitalist relations. However, this development of the dominance of financial capital over productive capital must be treated with remind, since it was high interest rates that attracted money capital to London and the fact that the UK is one of the main countries attracting fruitful investment (particularly from US-based multinationals).
So what can we learn from the British experience? The British case illustrates that there is nothing uncomplicated about the choice between government and the market: both are flawed mechanisms in terms of maximising efficiency and both require a profoundly rooted underlying consent about their means of action and acceptance of their distributional outcomes. Lever later granted in 1974/75 that, ��modern governments, overestimated their competence to fashion and manage the complex pedals of a adult economy. They wrongly assumed that they understood all the reasons for its failings and so, not surprisingly, were all too ready to lay hands on shallow remedies for overcoming them. And all this without any attempt to understand the economies of an increasingly interdependent world�� .
It remains to be said that that the nation-state provides the domestic political underpinning for the permanence of global capitalist relations. Therefore in order to maintain the position of a nation state��s integration into the ��world market�� nation states are under constant pressure to make more effective use of available resources. Failure to achieve this will result in a loss of reserves, precipitated by balance of payments difficulties, and inflationary pressure, provoking global exchange instability and financial crisis.
ENDNOTE
* Here are two quite similar definitions of the term Euro-dollars:
Robert Gilpin, (The Political Economy of International Relations, Princetown University Press, 1987, p. 314-315), states that: The Euro-dollar market received its label from American dollars on deposit in European (especially in London) banks yet remaining outside the domestic monetary system, and the stringent control of citizen monetary authorities.
Enzig and Quinn (The Euro-dollar System: practice and theory of international interest rates, MacMillan Press, 6th version, 1977, p. 1) state that: the Euro-dollar system is a term used to narrate the market in dollar deposits and credits which exists outdoor the United States of America.
FCO 59/212: Economie Affairs (External), International Monetary Matters, Euro-dollar Market, (1/11/1967-8 /5/1968) (Foreign Office �C Economic Relations Department), File Number: UE 4/44
Marx Karl, Contribution to the Critique of Hegel��s Philosophy of Law, in Marx/Engels 1975, vol: 3, p32.
E. Wayne Clendenning, Euro-dollars: The problem of control, The Banker, April 1968
PRO document FCO 59/212: Economie Affairs (External), International Monetary Matters, Euro-dollar Market (Jan 1967- December 1967)
PRO File IR/40/17474: Memo from J.G. Littler to Mr. Andren on alien currency Borrowing by regional authorities, 31 March 1969.
PRO File IR/40/17474: Confidential letter, from Mr. J.G. Littler to Mr. Andren titled foreign currency borrowing by local authorities, 14 March 1969.
PRO File IR/40/17474: Confidential letter from G.B.N. Hartog to Mr Elliston,[link widoczny dla zalogowanych], titled Finance Bill: Eurobond issues by local authorities, 31 March 1969.
T 308/11: Use of ��Windfall�� Dollars To (A) Improve UK Balance of Payments Position (B) Reduce UK Dollar Indebtedness, (December 1960)
T 236/6260: IBRD- Placing of Dollars Funds in London, 18th August 1960
PRO File T 230/1056: UK submission to working gathering No. 3 of OECD Economic Policy Committee 1969 (28/01/69 �C 11/11/69). File Number: 2EAS 549/188/02
PRO File T 230/1056: UK submission to working party No. 3 of OECD Economic Policy Committee 1969 (28/01/69 �C 11/11/69). File Number: 2EAS 549/188/02
Burgess S and Edwards G, The Six plus One, International Affairs, no: 64, 1988, p407.
Camps M, Britain and the European Community 1955-63, Oxford University Press, Oxford, 1964.
PRO file T234/720, Memorandum titled,[link widoczny dla zalogowanych], What went Wrong? Was prepared by the Treasury, July 1959
Harold Lever, The closets of 1964-70 had highly gifted individuals. Why then was so mini accomplished?, The Listener, 22 November 1984, p24-25.

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