| 1935-c.1970 |
| The general level of prices rises every year but at a moderate rate. |
| p 395-396 |
|
| 1944-1971 |
| The agreement, reached at Bretton Woods in New Hampshire, USA, envisages a system of
convertible currencies, fixed exchange rates, and free trade. New financial institutions
are to be established; the International Monetary Fund and the International Bank for
Reconstruction and Development. Plans for an International Trade Organization fail as they
are not ratified by the US Congress but they pave the way for the General Agreement on
Tariffs and Trade (GATT). |
| p21,444-445,516 |
|
| 1950-1970 |
| Average annual growth in the 1950s is 9.2%, comfortably exceeding an ambitious plan
for doubling the average income in a decade. In the 1960s growth is even higher, averaging
10.7% annually. |
| p 589 |
|
| 1952-1967 |
| The authorities encourage mergers and amalgamation among smaller banks to strengthen
the banking system. The number of reporting banks declines from 517 in 1952 to
reach its low point of 90 in 1967. |
| p 624 |
|
| c. 1960- |
| The rapid increase in the world's population, especially in the Third World, hampers
the attempts of the poorest nations to escape from their poverty and adds to inflationary
pressures, which tend to be far worse in developing countries than industrial ones, as
well as exacerbating environmental problems. |
| p 5-9,43,593-597 |
|
| c. 1960 |
| By the 1960s primitive forms of money, e.g. cowrie shells and manillas, that were
still in widespread circulation only a few decades earlier have virtually disappeared from
use in most countries, with a few minor exceptions (e.g. the use of fei stones in Yap).
The replacement of primitive by modern money, together with the move from subsistence to
market economies, means that the lives of more people are directly affected by monetary
policy. |
| p 8,36,600 |
|
| 1960 |
| The main recommendation of the Rueff committee is carried out with the replacement of
the old franc by a new heavy franc equivalent to 100 of the old. |
| p 564 |
|
| 1961 |
| This is created by broadening the membership of the old Organization for European
Economic Co-operation. |
| p 444 |
|
| 1961 |
| Initially it deals in only 19 securities but by 1983 the total reaches 168 and the
number of shareholders exceeds 700,000. |
| p 612,620 |
|
| 1962 |
| The new central banks in Ghana and Nigeria have taken over its functions. |
| p 609-610 |
|
| 1963 |
| The longevity of the Act, passed in 1934, was a sign of the lingering power of the
silver lobby. |
| p 515 |
|
| 1965-1987 |
| From 13 US banks with a total of about 200 foreign branches the numbers increase to
about 200 banks with around 800 branches. The growth is temporarily interrupted by the
stock market crash of 1987. |
| p 525 |
|
| 1965-1967 |
| The rigid barriers between deposit and investment banking are broken down and opening
new bank branches is made easier. Freedom is given for the leasing of capital goods on
hire purchase and various other restrictions are removed. |
| p 564 |
|
| c. 1965 |
| Despite the inroads of coins and banknotes the use of fei stones as currency in the
central Pacific islands of Yap has still not completely disappeared by the mid-1960s.
These stones, varying in size from saucers to millstones were quarried in Palau, 260 miles
from Yap, or the even more distant Guam. |
| p 37 |
|
| 1967 |
| The prime minister Harold Wilson's pronouncement that the pound in your pocket is
not devalued is rendered invalid by an increase in inflation. |
| p 398,521 |
|
| 1968 |
| Much later than most European countries, Britain sets up a postal giro system for
money transfer. Because of the lateness of its creation the clearing banks and building
societies have already captured a large part of the working class market that is one of
its main targets. |
| p 405 |
|
| 1968 |
| For the first time since 1893 the US runs a deficit in its balance of trade. |
| p 521 |
|
| 1968 |
| It is created to provide long-term finance for industry and to support the
government's chosen priority sectors. |
| p 628 |
|
| 1969-1983 |
| The government's attempts to control rural moneylenders result in such a shortage of
credit in many villages that agricultural output falls. The authorities react by
stimulating the growth of cooperatives and the formation of bank branches in villages. The
number of banking offices increases from 8,262 to 42,016. |
| p 642-625 |
|
| 1969 |
| Later other private Indian banks are also nationalized but not foreign banks. |
| p 624 |
|
| 1969 |
| These are to tide over countries with balance of payments difficulties. By this time
all countries have dispensed with internal circulation of gold and, in most cases, do
without gold backing for their currencies. The creation of SDRs makes international trade
less dependent on the constraints of an almost fixed supply of gold or the vagaries of
favourite currencies. |
| p 519-522 |
|
| 1970 |
| The building societies' success in capturing a growing share of the rising total of
personal savings is partly due to the huge growth in their branch network and partly due
to the official belief that only banks create money and hence need to have their powers
controlled. |
| p 408-410 |
|
| 1970 |
| By the end of 1970 deposits in American banks in Britain have grown seventy-one times
since 1959 and exceed those of the London clearing banks and are also 10 times those of
the Scottish banks. |
| p 408,412-418 |
|
| 1970 |
| This is intended to close the loophole allowing banks to evade restrictions on opening
branches. However its effect is limited as subsidiaries are allowed to engage in certain
banking activities. |
| p 539 |
|
| 1971 |
| After a big drop in US gold reserves and a large increase in foreigners' claims on US
dollars, the US suspends the convertibility of the dollar to gold. Although the IMF had
been set up to promote exchange rate stability it adapts quickly to a world of floating
exchange rates. |
| p 445,518,521 |
|
| 1971 |
| Instead of 12 pence in a shilling and 20 shillings in a pound, the pound is divided
into 100 new pence. |
| p 442 |
|
| 1972 |
| The EEC narrower margins scheme (the so-called snake) sets narrow limits
for fluctuations in the values of members' currencies. After only 6 weeks Britain leaves
and the pound floats freely against all other currencies for the next 18 years. |
| p 445,446 |
|
| 1973 |
| The European Economic Community is enlarged by the accession of Britain, Denmark and
Ireland in January 1973. |
| p 443 |
|
| 1973 |
| As the system of fixed exchange rates starts to break down the US devalues the dollar
twice and then gives up the attempt to fix its price in terms of gold. |
| p 521-522 |
|
| 1973-1974 |
| Partly as a result of the Bank of England's adoption of a new policy in 1971 of
increasing competition in the supply of credit a crisis develops in finance houses lending
money for the purchase of consumer durables. A lifeboat operation prevents about 30
secondary banks from collapsing and at least another 30 receive other forms of assistance.
|
| p 406-407,414,419-423 |
|
| 1974 |
| The price of oil is quadrupled transferring large sums which would have been spent, to
OPEC countries whose powers of absorption are low and savings high. The rate of growth of
world trade is greatly reduced as is the growth of the Japanese economy compared with its miracle
years. Although western economies are badly hit the less developed countries fare
worst of all. |
| p 590,594,597,599,615,632 |
|
| 1974 |
| The failure of the West German Bankhaus I.D. Herstatt precipitates an international
crisis. Prompt co-operation by various international authorities averts widespread
failure. |
| p 427 |
|
| 1976 |
| This starts a widespread move in other states to legalize interstate banking. In most
cases entry is restricted to banks from neighbouring states but some states allow entry
from any part of the US. |
| p 541 |
|
| 1976 |
| A financial crisis causes the socialist government to abandon Keynesian policies after
inflation reaches over 25% and adopt monetarism instead. |
| p 429-430 |
|
| 1976 |
| Hayek argues that the freedom of consumers to use whatever currency they choose would
be a better guarantor of the value of money than government monopoly. |
| p 647-648,650 |
|
| 1978-1980 |
| OPEC doubles the price of oil between 1978 and 1980. This leads to an increase in
interest rates, pushes industrial countries into a deep recession, and is a contributing
factor in the Third World debt crisis of the 1980s and 1990s. |
| p 633-634 |
|
| 1978 |
| This seeks to combine Keynesian concern for full employment with monetarism: two
incompatible bed-mates. |
| p 531 |
|
| 1978 |
| Barter is still widely used in world trade, particularly in deals involving communist
countries and countries short of hard currency. |
| p 20,21 |
|
| 1979-1990 |
| Margaret Thatcher greatly strengthens the commitment to monetarism. Manufacturing
industry is badly affected but the financial sector is strengthened. The average rate of
inflation is actually higher than during the Keynesian era from 1934-1976. |
| p 431-441 |
|
| 1979 |
| This includes an exchange rate mechanism allowing narrow fluctuations of 2.25% (6% in
the case of certain weak currencies) either side of an agreed central rate, a
strengthening of the European Monetary Cooperation Fund, founded in 1973, by the deposit
of 20% of each member's gold and dollar reserves, and the creation of the new European
Currency Unit or Ecu, based on the weighted average of 10 European currencies. |
| p 447-448 |
|
| 1979 |
| Their removal strengthens the role of the City of London in the world's financial
markets. |
| p 448 |
|
| 1979 |
| The purpose of the Act is to rectify weaknesses in the financial system revealed by
the secondary banking crisis in 1973-1974. |
| p 424-425 |
|
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