E-Book Overview
Gary Burn examines how in 1950s London, City bankers invented a new form of money and escaped offshore, beyond the jurisdiction of monetary authority. This most momentous financial innovation since the bank note, paved the way for globalization. It was a first shot in the neo-liberal counter-revolution against the Keynesian welfare state. This is the story of the Eurodollar and the re-emergence of global capital. It tells how the City discarded sterling and reclaimed its historic role as the world's foremost financial centre.
E-Book Content
The Re-Emergence of Global Finance Gary Burn
The Re-Emergence of Global Finance
This page intentionally left blank
The Re-Emergence of Global Finance Gary Burn
© Gary Burn 2006 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published in 2006 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world. PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–0–230–00198–5 hardback ISBN-10: 0–230–00198–X hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Burn, Gary, 1952– The re-Emergence of global finance / by Gary Burn. p. cm. Includes bibliographical references and index. ISBN 0–230–00198–X 1. Euro-dollar market. 2. International finance. 3. Monetary policy – Great Britain. 4. Monetary policy – United States. 5. Great Britain – Economic policy. I. Title. HG925.B87 2006 332⬘.042––dc22 10 9 8 7 6 5 4 3 2 1 15 14 13 12 11 10 09 08 07 06 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne
2005058548
This book is dedicated with love and thanks to my parents Ilse and Roy
In the living world there are no individuals entirely sealed off by themselves; all individual enterprise is rooted in a more complex reality, an ‘intermeshed reality’, as sociology calls it. The question is not to deny the individual on the grounds that he is the prey of contingency, but somehow to transcend him, to distinguish him from the forces separate from him … Fernand Braudel (On History: p. 10) In truth, the historian can never get away from the question of time in history: time sticks to his thinking like soil to a gardener’s spade. Fernand Braudel (On History: p. 47)
Contents List of Figures
ix
List of Abbreviations
x
Preface
xi
1 Introduction
1
The end of a Golden Age Global finance v. national capitalism Redrawing sovereignty in the City Accumulation and institutional change
2 The Evolution of the Euromarkets Defining Euromoney The origins of the Eurodollar market Developing a foreign market for dollars US ba