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

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Meanwhile, US multinational companies were making large investments to expand their overseas operations. Though US balance of payments deficits had been modest from 1950 to 1957, from 1958 to 1962 US deficits reached levels of between $2.5 billion and $3.8 billion.ssss1 In 1961, the Federal Reserve began expressing concerns that the growing Eurodollar market may ‘constitute a danger to stability’,ssss1 but by that time the Bank of England had grasped the importance of this market in developing international trade and to restoring the City of London's role as a leading international financial centre. By 1963, the Bank for International Settlements (BIS) estimated the size of the Eurocurrency market to be $12.4 billion, of which three-quarters was in US dollars. This large base of offshore dollar deposits soon became the target of bankers helping corporations to raise funds via bond issues.

In the post-war years, New York had been the principal financial centre where borrowers went in search of investment. The first international bond issue after WW2 was by the World Bank in the New York-based foreign dollar bond market (or, as it came to be known, the ‘Yankee’ market). This was largely a public sector market, with issuers including governments, government agencies and municipalities. Issues were required to comply with the 1933 Securities Act and be registered with the Securities and Exchange Commission (SEC). Regulations also required that a US investment bank acted as lead manager on the issue and that there be a US domestic underwriting syndicate. Many US public pension funds were not permitted to buy these foreign securities and US insurance companies were restricted on the amount they could hold, so these issues were increasingly bought by European investors through discretionary private banking accounts with Swiss or Benelux banks, or via London brokers. Towards the end of the 1950s, three-quarters of these issues were being bought by European investors.