The State, the City and the Euromarkets

Abstract

The purpose of this chapter is three-fold, first, to examine how in the process of the new global money medium becoming anchored in the old institutional framework, it was adjusted and reconfigured to stand outside the regulated international financial system; how the ‘historical mechanisms’ inherited from the old London bill market that existed in the free international financial structure of the nineteenth century were fused with new techniques and utilised to overcome the ‘obstructions’ created as a result of the highly restrictive international financial system created at Bretton Woods. Second, it is to unpack the institution defined by the all-embracing term ‘Euromarket’, in order to disentangle what are in reality two distinct financial instruments, the Eurodollar and the Eurobond. Revealing, in the process, the considerable confusion that has hitherto contributed to a misunderstanding of the role of those agencies responsible for these financial innovations. A fact which is directly responsible for the prevalence of much of the state v. market dichotomic analysis which so dominates discussion of the Euromarkets. Finally, it is to then re-appropriate the new evidence so as to establish the extent to which each of the component parts of the City-Bank-Treasury nexus was involved in what would appear to have been a fundamental redrawing of British sovereignty.