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

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With the rise in Cold War tensions, the Soviet Union and countries within the Eastern bloc became concerned that the US government might confiscate or freeze their dollar deposits, so they began to transfer these holdings from New York to London and Paris. The first such transfer by the Soviet Union was to the Paris-based Banque Commerciale pour l'Europe du Nord, which had the telegraphic address ‘Eurobank’. It is said that the term ‘Euro-dollar’ traces its origins to this.ssss1

There were other attractions to holding dollar deposits offshore, however. Offshore dollar deposits were not subject to US reserve requirements that forced banks to hold a certain proportion of their deposits in non-interest-bearing accounts with the Federal Reserve. Furthermore, Eurodollar deposits fell outside the jurisdiction of the Federal Reserve Board's Regulation Q, which was promulgated in 1933 to avoid the excessive competition that had been deemed partially responsible for bank failures during the Great Depression. Between 1935 and 1956, Regulation Q capped the interest rates that US banks could pay on deposits to one percent for 30-day deposits and to 2.5 percent for 90-day deposits.ssss1 Therefore, so long as offshore banks could lend the dollars out at market rates, they could afford to pay higher interest rates to depositors than domestic US banks.