From Little Acorns…
In the immediate post-war years the foreign currency business of banks consisted mainly of traditional services such as payments abroad and financing of national foreign trade. Sterling continued as an important, if not the predominant, vehicle for the invoicing of world trade flows,1* and London remained a centre of trade finance and for the discount and acceptance of trade bills. Because of restrictions on the convertibility of currencies, this activity was, however, largely confined to ‘Sterling Area’ countries. With the post-war reconstruction of Europe and large US balance-of-payments surpluses, there was a period of dollar shortage and several countries imposed controls on the import of goods as a means of conserving scarce dollar foreign exchange reserves.
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