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

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After returning from his visit to the vault, Ross told his colleagues that they should sue Schroder for negligence and refuse to pay the interest charges. The firm's leadership laughed it off and instructed him to pay the charges and to absorb them into his profit and loss account.

Traders weren't the only ones afflicted by the paperwork crisis, however. The market was unregulated and unscrupulous banks would frequently exploit the inefficiencies in the settlement infrastructure. The Belgian dentist and his ilk, who represented around 90 percent of market demand, sometimes wouldn't see their bonds for up to two years after paying for them. When they were finally delivered, it would often be without the intervening coupon payments. If this situation were allowed to continue, it would eventually kill the market.

The logjam in New York only affected US dollar-denominated Eurobonds. Luxembourg, which had long historic, linguistic and commercial ties to its neighbours, had emerged as an offshore banking centre within Europe. By the late 1960s, Luxembourg banks had developed a thriving business in bond settlements and might have seemed poised to capture more business from New York. However, operations there too were paper-based and involved the transportation of bond certificates between various banks in armoured vehicles, which was a costly process prone to settlement errors. A greater problem in Luxembourg though was its paucity of fine dining venues.