Читать книгу Financial Cold War. A View of Sino-US Relations from the Financial Markets онлайн

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As the profitability of the old fixed commission structure disappeared, US brokers sought to scale up in order to extract cost efficiencies. Throughout the 1950s and 1960s, there had been four mergers between major US securities firms. Between 1975 and 1980, there were 29 such mergers and the pace accelerated throughout the 1980s and 1990s. Names like White, Weld & Co. were swallowed up by Merrill Lynch, while Kidder Peabody was merged into Paine Webber, which itself was acquired by the Swiss bank UBS in 2000.

These enlarged US firms were also incentivised to seek out new markets overseas and to develop new business lines. The international expansion of US financial institutions contributed to the further globalisation of the dollar. However, it was the expansion of a particular new type of financial product that was to turbocharge the growth of dollar-based finance.

In a money-based economy, the price of all assets is referenced to the money unit of account. In allowing the dollar to fluctuate freely, Richard Nixon had unleashed far greater volatility in all financial assets. This created a need for producers, consumers and investors to hedge the risk of large price swings. It also created huge opportunities for financial speculators. With the end of their fixed commission structure in share trading, Wall Street firms were to discover a huge new profit centre in derivatives.