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

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In 1965, with the US balance of payments position coming under further pressure due to the Vietnam War, Lyndon Johnson extended the IET for a further two years. He also introduced voluntary restrictions on the transfer of funds overseas by US corporations and on foreign loans and investments by US financial institutions. The purpose of these restrictions was to encourage US companies to borrow overseas to finance their international investments. US corporations therefore started to look to the Eurobond market for financing.

As issuance passed the $1 billion mark in 1967, the US announced further measures to stem its negative balance of payments position. Voluntary restrictions were replaced by mandatory ones, which limited US companies’ overseas investments to set quotas. This meant that US multinationals now had no choice but to borrow overseas. US issuance in the Eurobond market jumped from $527 million in 1967 to almost $2 billion in 1968 and more US investment banks set up operations in London.ssss1 During the six years that these mandatory restrictions remained in force, US issuers accounted for 271 issues and raised almost $7 billion, or around one-third of the total new Eurobond issuance over that period.ssss1 Soon, the accompanying explosion in international securities trading would place strains on the cross-border settlement infrastructure.