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

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It was galling to the European intermediaries that, although they were handling much of the distribution, US underwriters were earning most of the new issue fees. European distributors therefore began to look for a way to handle the entire new issue process by themselves.

At the time, Switzerland would have seemed the natural home for what would become the massive Eurobond market, since most of the early issues of US foreign dollar bonds were placed there. Switzerland itself had a sizeable market for foreign bonds issued in Swiss francs, which had started in 1947 and, by 1963, had the equivalent of around $790 million outstanding – slightly larger than the amount owed by European borrowers in the New York market.ssss1 White, Weld & Co., a New York-based firm that was one of the most prominent players in the foreign dollar bond market, formed a close relationship with Crédit Suisse and based its European activities in Zurich. So, what led the market to come to be centred on London?

As with most such decisions in international finance, it ultimately came down to questions of regulation and tax. Switzerland imposed a 35 percent withholding tax on interest paid on domestic issues to non-residents, but foreign issues were exempt from this. What weighed far more against Switzerland though was the tax authorities’ refusal to exempt bond trading from Swiss stamp taxes, and a Swiss Federal issue tax of 1.2 percent that made it unattractive for Swiss banks to underwrite and manage issues in Switzerland themselves.