Index

Alain Naef

doi:10.1017/9781108878333.019

Index

Accominotti, Olivier, 41–42, 70, 96–97, 146

Algeria, gold of, 155

Allen, William (Bill), 3, 216

Amsterdam, 74–75

Anglo-American Financial Agreement, 12–13

Antwerp, 74

Atkin, John, 38

Augmented Dickey–Fuller Unit root test, 57, 146–147

Bai–Perron break test, 32, 42, 201–202

balance of payments

in devaluation of 1949, 24–29

sterling area, 25

Bank Charter Act 1844, 75

Bank for International Settlements (BIS), 7, 23, 40–41, 73–74, 99, 107–108, 209–210

agreements, 125

on gold, 85

on gold club, 108

on gold standard, 29

Bank of Algeria, 155

Bank of Canada, 55, 106

Bank of England and, 55

Bank of England, 1–2, 14–17, 35, 37–38, 96–97, 106–108, 119–120, 133–135, 222–223

Bank of Canada and, 55

during Black Wednesday, 216

during Bretton Woods, 46–47

Callaghan on, 192–193

Capie on, 50–51

on devaluation of 1949, 20

on devaluation of 1967, 170–174

dollar markets and, 51–52

EEA and, 51–66

in ERM crisis, 210–211

Federal Reserve and, 3, 54–56, 100, 115–116, 118, 122, 126, 182–183

FOMC and, 179

foreign currency credit instruments of, 123–126

foreign exchange interventions of, 47–54

forward intervention of, 51–53, 62

in gold crisis of 1964, 141, 143–144

gold transactions of, 88, 90–91

IMF and, 101–102

IMF crisis of 1976 and, 200–203

independence of, 2

intervention strategies, 56–59

in London foreign exchange market opening, 40–42

London gold market and, 86–91

market stability maintained by, 50

New York Federal Reserve and, 58–59

performance of, 59–66

Radcliffe Report on, 68–69

reserves of, 170–174, 202

spot market interventions of, 62, 119

swap networks of, 116–121

transparency of, 173

United States and, 20

window dressing, 173–179

Bank of Italy, 101–103, 206–207, 210

Bank Rate, 15

Banque de France, 48–49, 70, 152–153, 155–156, 165, 221–222

Basel, 107

Basel Agreements, 125

Basel Group Arrangement, 125

Belgium, 210

bid–ask spread, 41, 97, 168, 186

bilateral countries, 9–10

exchange rates for, 11

BIS. See Bank for International Settlements

black market, 31

after devaluation of 1949, 43–44

Black Wednesday, 195, 204–205, 211, 213–218, 223

Bank of England during, 216

causes of, 218–220

interest rates during, 216–217

Blackler, 119–120

Blessing, Karl, 182–183

Bodner, David, 51–52, 178

Bolton, George, 41–42, 44–45, 76, 81

Bordo, Michael D., 47–60, 70, 120, 149–150, 169–170

Borio, Claudio, 18–19

Bretton Woods, 2–3, 6, 8, 32, 60, 63, 65–67, 92, 115–116, 169

Bank of England during, 46–47

convertibility in, 10

currency speculation during, 145–146

devaluation of 1967 and, 181

end of, 148, 159–160, 180

Federal Reserve during, 54–56

gold and, 78–79, 88–89

in gold crisis of 1961, 100

Kissinger on, 189

London gold market and, 73–74

spot interventions during, 51–52

stabilisation after, 187–189

stability of, 36–37

sterling stability under, 36

swaps in, 122–123

US exit from, 184

Brexit, 224

Bridge, Roy, 50–51, 55, 105–106

Coombs and, 105

British Board of Trade, 19

Bundesbank, 3, 182–183, 208–210, 212–215, 217–218

Burk, Kathleen, 192, 194–195, 199–200

Burns, Arthur, 184

Cairncross, Alec, 3–4, 20, 22, 192, 194–195, 199–200

Callaghan, James, 122, 128

on Bank of England, 192–193

budget of, 135–136

Canada, 103–104

Capie, Forrest, 12, 22, 47, 78, 86, 115, 119, 196–197

on Bank of England, 50–51

on swaps, 173

on window dressing, 174

capital controls, 35

central banks, 2–3, 56, 103–104

in Gold Pool, 109

signalling, 50

swaps between, 120–121

Chase Manhattan, 126

Churchill, Winston, 36–37

Ciampi, Carlo, 210

Clarke, Otto, 44–45

Clement, Piet, 138

Cobbold, Cameron, 172

Cold War, 127–128, 137–138

collective approach, 45, 92–93

Comstock, Alzada, 69–70

Conservative Party, 132, 205

convertibility, 36, 57–58, 99

defining, 93–94

of dollar, 180

Eichengreen on, 7–8

foreign exchange interventions and, 60–61, 63

foreign exchange markets and, 97

IMF on, 95

Marshall Aid and, 94–95

in 1958, 92–94

parallel markets and, 95–98

politics of, 94–95

suspension of, 12

convertibility crisis of 1947, 10–14

consequences of, 15–17

EEA in, 13

convertibility of sterling, 6–7

defining, 6

restoration of, 6–8

Coombs, Charles, 3, 10, 73, 76–79, 81, 101, 105, 120–122, 138, 177–180

Bridge and, 105

on Nixon, 181–182

Cripps, Stafford, 19–20, 22

Cromer, Lord George Rowland Baring, 126

dealers (Bank of England), 111–114, 130

dealers’ reports, 130, 150, 160–165

depreciation smoothing measures, in foreign exchange interventions, 60

Despres, Emile, 81–82

devaluation

against dollar, 30

French, 93–94

devaluation of 1949

balance of payments problem in, 24–29

Bank of England on, 20

black market after, 43–44

causes of, 22–24

Economist on, 33–34

Federal Reserve and, 31

IMF on, 21, 29

international relations and, 18–19

international repercussions of, 29–34

leads and lags in, 37–38

politics of, 19–21

post-war parities readjusted after, 18–19

spot exchange rates after, 40

triggers for, 18

United States on, 19–21, 29

devaluation of 1967, 128–129, 134–135, 144–146

Bank of England in, 170–174

Bretton Woods and, 181

disclosure of reserves and, 170–174

dollar in, 161–162

events preceding, 157–160

Federal Reserve on, 149–150

Gold Pool and, 150

gold prices and, 164

Johnson, H., on, 148

management of, 166–170

market stability after, 167–168

run on gold and, 149–151

United States in, 157–160, 163

Wilson on, 166

dollar, US, 13, 23–26, 29, 39

Bank of England and markets for, 51–52

convertibility of, 180

devaluation against, 30

in devaluation of 1967, 161–162

REER of, 32–33

sterling and, 16–17

in sterling crisis of 1964, 137

dollar area, 9

Earland, 51–52

Economic and Financial Affairs Council (ECOFIN), 208–209, 211–212

Economist, 37–38, 194–195, 199–200

on devaluation of 1949, 33–34

on London foreign exchange market reopening, 38

on sterling crisis of 1964, 132

EEA. See Exchange Equalisation Account

Eichengreen, Barry, 3–4, 20, 22, 78, 149–152

on convertibility, 7–8

Einzig, Paul, 7–8, 22–23

on leads and lags, 37–38

Emergency Powers Act, 8

Emminger, Otmar, 210

EMP. See Exchange Market Pressure

EPU. See European Payment Union

ERM crisis, 1992, 3, 48–49, 204–205, 224

Bank of England in, 210–211

causes of, 205–207

France in, 221–222

shocks from, 207–213

sterling interventions in, 218

ERP. See European Reconstruction Plan

EU Monetary Committee, 211–212

the euro, 1

eurodollar, 115–116, 125–126

European Community, 217

European Monetary Union, 1

European Payment Union (EPU), 9–10, 18, 31, 33–34

European Reconstruction Plan (ERP), 5–6

Exchange Control Act, 5, 8–9, 93

Exchange Equalisation Account (EEA), 12–13, 25–26, 104, 170

Bank of England and, 51–66

in convertibility crisis of 1947, 13

establishment of, 67–68

foreign exchange intervention and, 51–66

Howson on, 69–70

ledgers, 71, 175–177

reserves of, 13, 23–26, 39, 51–72, 86–87, 134, 176, 187–189

role of, 67–68

schematic structure of, 67

window dressing and, 177

Exchange Market Pressure (EMP), 15, 138–139, 143, 207–208, 211–213, 215

counterfactual, 220

sterling EMP index, 16

Exchange Stabilisation Fund, 70

exports, 26–29

Federal Open Market Committee (FOMC), 138, 178–179

Bank of England and, 179

Federal Reserve, 31, 50–51, 62, 81–83, 99, 103, 106–108, 141–142

Bank of England and, 3, 54–56, 100, 115–116, 118, 122, 126, 182–183

during Bretton Woods, 54–56

devaluation of 1949 and, 31

on devaluation of 1967, 149–150

forward intervention of, 51–52

Gold Pool and, 101–107

swap networks, 117

transparency of, 172

Federal Reserve Bank of New York, 10, 73

Federal Reserve Bulletin, 172

Fforde, John, 41–42, 51–72

Finance Act of 1932, 47

Financial Times, 23, 173, 212–213

fixed exchange rates, 180

floating, 45

FOMC. See Federal Open Market Committee

Fond de Stabilisation des Changes, 70

foreign currency credit instruments, of Bank of England, 123–124

foreign exchange interventions, 2, 225

Bai–Perron break test on, 201

of Bank of England, 47–54

convertibility and, 60–61, 63

depreciation smoothing measures in, 60

EEA and, 51–66

exchange rate reversal in, 60

net, 48

performance of, 59–66

strategies for, 56–59

success criteria, 60, 64–65

foreign exchange markets, 2, 35

band broadening in, 40–41

convertibility and, 97

integration of, 97

liquidity of, 43

forward intervention, 53, 119

of Bank of England, 51–53, 62

of Federal Reserve, 51–52

Norman on, 53–54

forward premia, 97

forward rates, in sterling crisis of 1964, 132

forward rates, sterling, 169–170

Fousek, 118–120

Fowler, Henry, 149, 163

franc, 35–36, 69

France, 95, 107–108, 158, 162, 181

in ERM crisis, 221–222

in gold crisis of 1964, 143

Gold Pool and, 151–164

free forward markets, 38

free offshore markets, sterling in, 43–44

free sterling, 10

French devaluation, 93–94

fundamental value, 63–64

GAB. See General Arrangement to Borrow

Gaitskell, Hugh, 19–20

Gaulle, Charles de, 95, 136, 143, 151–152, 160–163, 180

Gavin, Francis J., 149

General Arrangement to Borrow (GAB), 125

Germany, 95, 182–183, 206–210, 213

Glorious Revolution, 74–75

gold, 13, 23–26, 39. See also London gold market

of Algeria, 155

Bank of England transactions, 88, 90–91

BIS on, 85

Bretton Woods and, 78–79, 88–89

devaluation of 1967 and prices of, 164

fixing price, 145

global price of, 111–114

Gold Pool and price of, 111–112

historical markets for, 74–75

IMF on markets for, 79

market actor price preferences, 89

monthly prices, 137–138

New York Federal Reserve on prices of, 105, 108

Paris market for, 77, 164–165

of Russia, 82, 85–87, 89–90

sales by country, 103

South Africa and, 79–84, 104

sterling and, 127–128, 144–147

US holdings, 32, 81–82, 91, 105–106

world production of, 85

yields, costs, and profits, 80

Zurich market for, 76, 164–165

gold, 1967 run on, 181

devaluation of 1967 and, 149–151

Johnson, H., on, 149–150

gold club, BIS on, 108

gold crisis of 1961, Bretton Woods in, 100

gold crisis of 1964–68

Bank of England in, 141, 143–144

France in, 143

Gold Pool in, 138–140, 142–143

start of, 136, 142–143

sterling crisis and, 136–147

United States in, 141

Gold Pool, 86, 90, 106, 110, 115, 137–138, 146–148, 151, 154–155, 158, 225

central banks in, 109

creation of, 99–100, 111–114, 118

devaluation of 1967 and, 150

existence of, leaked, 111

fall of, 153–154

Federal Reserve and, 101–107

France and, 151–164

in gold crisis of 1964, 138–140, 142–143

gold prices and, 111–112

interventions, 159

operation of, 109–111

politics of, 107–108

quotas in, 109–110

success of, 111

syndicates, 109

United States and, 159–160

Gold Reserve Act of 1934, 91, 105–106

gold standard, 6

BIS on, 29

history of, 75–76

Nixon ending, 184–185

gold window, 152–155

closing of, 184–187

cumulative gold purchases at, 157

Gourzerh, M., 48–49

Great Depression, 32–33

Great Financial Crisis, 224–225

Group of Ten, 181

Guardian, 162–163, 165

Gurney, 53–54

Hall, Noel, 69–70

Hall, Robert, 19–20

Hallet, 182–183

Hamon, Mark, 196

Handelsblatt, 214

Harvey, Rachel, 78

Hayes, Alfred, 108, 126, 128–129, 182–183

Healey, Denis, 192, 198–199

Herald Tribune, 215

Howson, Susan, 22, 66, 68

on EEA, 69–70

Huber–White procedure, 146

Humpage, Owen F., 47–60

IMF. See International Monetary Fund

IMF crisis of 1976, 190–191

Bank of England and, 200–203

causes of, 191–194

rate cut during, 197–200

rumours about, 194–197

sterling in, 199

imports, 26–29

interest rates, 38

during Black Wednesday, 216–217

International Monetary Fund (IMF), 2, 19–21, 36–37, 79, 182. See also IMF crisis of 1976

Articles of Agreement, 40–41

Bank of England and, 101–102

on convertibility, 95

on devaluation of 1949, 21, 29

on gold markets, 79

as lender of last resort, 125

South Africa and, 79–80

international monetary system, 6–7

international relations, devaluation of 1949 and, 18–19

Italian lira, 208–209

Italy, 154–155, 206–207, 210–213, 217–220

James, Harold, 3–4, 21, 215

Japan, 224

Jay, Douglas, 37

Johnson, Harry

on devaluation of 1967, 148

on run on gold, 149–150

Johnson, Lyndon, 136, 163

Johnson Matthey, 75–76, 83–84

Kahn, Richard, 174

Keegan, William, 217

Kennedy, John F., 101, 103

Kindleberger, Charles Poor, 81–82

Kissinger, Henry

on Bretton Woods, 189

on Nixon, 185–186

Klug, Adam, 56, 58–59

Knoke, 53–54, 81

Kohl, Helmut, 212–213

Korean War, 32–33, 38–39

Labour Party, 19–20, 37, 52–53

1964 election of, 127–128

on swaps, 122–123

Lamont, Norman, 208–209

Larosière, Jacques de, 209–210

leads and lags, 22–23, 29

in devaluation of 1949, 37–38

Einzig on, 37–38

London foreign exchange market and, 38–39

Leigh-Pemberton, Robin, 215, 217–218

liberalisation, of London foreign exchange market, 42–43

Lloyds, 49

London

as financial centre, 35–36

spot rate, 14–15

London foreign exchange market, 35

alternatives, 43–45

Bank of England in, 40–42

Economist on, 38

leads and lags and, 38–39

liberalisation of, 42–43

moving average data for 1951–53, 41

negotiations, 36–38

reopening of, 38–43

London Gold Fixing, 76

London gold market, 73–76, 102–103, 164–165

Bank of England and, 86–91

Bretton Woods and, 73–74

behind closed doors, 83–86

competition of, 75–76

history of, 74–76

reopening, 78–83

schematic representation of, 84

as status market, 78–83

Maastricht Treaty, 205–206, 213–214, 217, 222–223

MacDonald, Ronald, 47–60, 169–170

MacLaury, 178–179

Manchester Guardian, 14–15, 36, 94–95, 162–163

Marshall Aid, 12, 15–16, 25–27

convertibility and, 94–95

Marshall Plan, 5–6, 12, 94–95

Martin, William McChesney, 20–21, 141–142

Mayor, John, 217

McCauley, Robert, 115–116

McKinnon, Ronald, 185–186

Meltzer, Allan H., 151–152

Minimum Lending Rate (MLR), 197–199

Mitchell, 199–200

MLR. See Minimum Lending Rate

Mocatta, Abraham, 74–75

Mocatta, E. E., 102–103

Mocatta, Moses, 74–75

Mocatta & Goldsmid, 74–76, 83–85

money markets, 47

Morgan Guaranty Trust Company, 126

Napoleonic Wars, 35–36

National Institute of Economic and Social Research, 133

National Plan, 129

National Provincial, 49

nationalization, 133

Needham, Duncan, 192–193, 195, 198–199

Netherlands, 210

New York, 55–57, 224

market volume in, 62

New York Federal Reserve, 76, 104, 182

Bank of England and, 58–59

on gold prices, 105, 108

New York Times, 133, 181

New Zealand, 195–196

Newton, Scott, 129–130, 134–135

Nigeria, 195–197

Nigerian Central Bank, 195–196

Nixon, Richard

Coombs on, 181–182

dollar convertibility suspended by, 180

gold standard ended by, 184–185

inauguration of, 166

Kissinger on, 185–186

monetary policy shift under, 181–183

Nixon shock, 180, 183–187

Norman, Montagu, on forward intervention, 53–54

O’Brien, Leslie, 183

Obstfeld, Maurice, 171

OEEC. See Organisation for European Economic Cooperation

Oliver, Michael, 47–60, 129–130, 169–170

orderly markets, defining, 47

Organisation for European Economic Cooperation (OEEC), 9–10, 94–95

over-the-counter (OTC) market, 83, 225

parallel markets, convertibility and, 95–98

Paris, 35–36

gold market, 77, 164–165

Phillips, Morgan, 19–20

Pixley & Abell, 75–76

Preston, 51–52, 104, 119

private loans, 125–126

probit regression, 63

Quarterly Bulletin, 69, 173, 176, 178

Radcliffe Report, 9, 29, 51–52, 66–67, 170, 172

on Bank of England, 68–69

reaction functions, 56–57

sterling, 57–58

Real Effective Exchange Rate (REER), 33

of dollar, 32–33

REER. See Real Effective Exchange Rate

Reinhart, Carmen, 29–31

reserves

of Bank of England, 170–174, 202

devaluation of 1967 and disclosure of, 170–174

of EEA, 13, 23–26, 39, 51–72, 86–87, 134, 176, 187–189

Rickett, Denis, 117

ROBOT scheme, 44–45, 92–93

Roche, T. J., 106

Rockoff, Hugh, 171

Rogoff, Kenneth, 29–31

Rothschild & Sons, 83–85

Rowan, Leslie, 44–45

Russia, gold of, 82, 85–87, 89–90

Salant, Walter S., 81–82

Samuel Montagu & Co. Broker, 75–76, 83–84, 86–87

Sanford, H. L., 55, 107

SBA. See Stand-By Arrangement

Schenk, Catherine, 3–4, 7, 12, 21–22, 115–116, 125–126

on Wilson, 128–129

Schlesinger, Helmut, 3, 208–210, 213, 215–218

Schwartz, Anna, 47–60, 70

SDRs. See Special Drawing Rights

security sterling, 10

Sharps Wilkins, 75–76

short term swaps, 121–123

Simard, Dominique, 149–150

Smith, Gregor W., 56, 58–59

snake, 189

Société Générale, 49

Soros, George, 209–210

South Africa

gold and, 79–84, 87–90, 104

IMF and, 79–80

South African Reserve Bank, 87

Special Drawing Rights (SDRs), 125

spot exchange rates, 57–58

after devaluation of 1949, 40

sterling crisis of 1964 and, 130, 140

spot interventions, during Bretton Woods, 51–52

spot market, 35

Bank of England intervention in, 62, 119

Stand-By Arrangement (SBA), 125

sterilisation, 69

sterling, 2–4, 168. See also convertibility crisis of 1947; devaluation of 1949

balances problem, 7–8

Bretton Woods and stability of, 36

in circulation, 7–8

dollar and, 16–17

EMP index, 16

in ERM crisis, 218

exchange rates for types of, 10

forward rates, 169–170

free, 10

in free offshore markets, 43–44

gold and, 127–128, 144–147

in IMF crisis of 1976, 199

reaction functions, 57–58

security, 10

transferable, 57–59, 95–96

sterling areas, 5, 8–10

balance of payments, 25

creation of, 8–9

exchange rates in, 9

trade deficits in, 25–26

transferable-account, 9

sterling crisis of 1964, 127–136

causes of, 130–131

dollar in, 137

Economist on, 132

forward rates in, 132

gold crisis and, 136–147

second, 135

spot exchange rates and, 130, 140

sterling-dollar bid-ask spread index, 168

success criteria, foreign exchange interventions, 60, 64–65

Suez crisis, 56

Svensson, Lars E. O., 64

swaps

annual summary of, 121

of Bank of England, 116–121

benefits of, 115

in Bretton Woods, 122–123

Capie on, 173

between central banks, 120–121

credit instruments, 123–126

credit lines, 122

ethical concerns regarding, 174

of Federal Reserve, 117, 120

interest rates in, 120

Labour Party on, 122–123

Short-term, 121–123

in window dressing, 173, 175–176

Swiss National Bank, 14–15, 43–44, 96–97, 116–117

Switzerland, 19–20, 43–44, 51, 103–104

exchange rates in, 14–15

Tokyo, 224

Toniolo, Gianni, 18–19, 100, 138

trade deficits

in sterling area, 25–26

with United States, 26–28

transferable sterling, 57–59, 95–96

transferable-account countries, 8–10

Treasury bills, 68–69

Triffin, Robert, 81–82, 116, 122–123

United States (US), 36–37

Bank of England and, 20

Bretton Woods exited by, 184

British trade deficit with, 26–28

on devaluation of 1949, 19–21, 29

in devaluation of 1967, 157–160, 163

in gold crisis of 1964, 141

gold holdings, 32, 81–82, 91, 105–106

Gold Pool and, 159–160

UK relations with, 20–21

Vector Autoregression (VAR), 219

Vietnam, 141

volatility, 63

Volcker, Paul, 183–184

Waight, Leonard, 69–70

Wall Street Journal, 79–80, 133, 135, 140–141, 214

Washington Post, 162–163

Wass, Douglas, 192

Westminster Bank, 49

Wilson, Harold, 19, 92–93, 127, 133, 135, 163

on devaluation of 1967, 166

Schenk on, 128

window dressing

of Bank of England, 173–179

Capie on, 174

defining, 171

EEA ledgers and, 177

swaps in, 173, 175–176

Wood, Geoffrey E., 22

World War I, 35–36

World War II, 91, 194

Yeager, Leland, 38–39, 95–96

Zurich, 56–57, 93–94, 97

gold market, 76, 164–165

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Summary

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