The Euromarket and the making of the transnational network of finance 1959 - 1979
This thesis analyses the role of the Euromarket, an offshore market for Eurodollars or expatriate US dollars, in the re-emergence of global finance during the 1960s and 1970s. It charts not only its Cold War origins and the development of various markets for Eurodollars, but also institutions and policies that shaped them from the return to convertibility in 1958 to the ill-fated efforts to regulate the nascent market by international financial institutions. By examining the nature of Eurodollars as both a US and global currency, the thesis sheds light on the changing features of the governance of global finance and its relationship with the economic sovereignty of nation-states. It argues that the Euromarket underwent repeated contestations as politicians, bankers, and economists vested their political ambitions and cultural assumptions in it. The popular, academic, and policy debates challenged the speculative nature of Eurodollars which would destabilise the domestic as well as the international monetary system of the Bretton Woods system. Without a single monetary authority, the tendency of the Euromarket to transcend the order of capitalist nation-states constrained national governments’ capacity to control capital flows and the autonomy of domestic monetary policy. However, nation-states were not impotent but deliberately sought to exploit the liquid pool of capital in Eurodollars. It was not merely the US government that benefited from the seigniorage of Eurodollars and the City of London which was reborn as the international financial centre in the Euromarket. Continental European countries that were hesitant about European economic integration, the UK Labour government, developing countries in the Global South, and even the Communist bloc, resorted to the Euromarket for their national interests. The ambivalent attitudes of national governments and their conflict of interests resulted in the failure of coordinated efforts to introduce the rules of the game but facilitated the transnational network of finance in Eurodollars.