© Roy Davies & Glyn Davies, 1996 & 1999.
Based on the book: A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5. (Page numbers in the 3rd edition published in 2002 may be slightly different).
c. 1960- | The Population Explosion becomes a matter of increasing concern |
---|---|
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 |
|
1965-1987 | Rapid expansion of US banks abroad |
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 |
|
1969-1983 | Number of banking offices in India increases five-fold |
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 624-625 |
|
1978-1980 | 2nd OPEC oil price shock |
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 |
|
1979-1990 | Thatcherism in Britain |
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 |
|
1980 - ? | Third World debt crisis |
During the 1970s many developing countries borrow large sums, many of the loans
being at variable rates from commercial banks which are very eager to lend
money after their coffers are swollen by money from OPEC countries following
the oil price hike in 1974. When interest rates rise in the industrial world in
an effort to curb inflation, the debts of many developing countries start to
rise beyond their capacity to repay them.
p 21,629-636 |
|
1980 | US Depository Institutions Deregulation and Monetary Control Act |
Some banks have been seeking to evade restrictions by leaving the Federal
Reserve System. Under this act all deposit-taking institutions are to be
subject to the Federal Reserve System's reserve requirements in a planned,
seven year programme.
p 532 |
|
1980 | Poland is unable to meet its debt obligations |
A few members of the Soviet bloc, like many Third World countries, are affected
by the developing international debt crisis. Poland's creditors agree to a
rescheduling of its debt obligations but western bankers rapidly withdraw funds
from other eastern European countries.
p 633 |
|
1982 | Mexican debt crisis |
A crisis caused by massive flight of capital from Mexico to the USA is tackled
by loans from the US government, the New York Federal Reserve Bank, the IMF and
the Bank for International Settlements. However the Mexican crisis triggers off
a flight of capital from other heavy Latin American borrowers such as
Argentina, Brazil and Venezuela.
p 633-634 |
|
1982 | US Garn-St Germain Act |
The powers of the Savings and Loan Associations (thrifts) are widened and as a
result the thrifts begin to diversify their assets.
p 533,540 |
|
1984-1990 | Rapid expansion of foreign banks in the US |
The value of foreign banks' assets in the US increases from $80 billion to $209
billion.
p 527 |
|
1984 | US Federal Appeals Court legalizes nationwide ATM networks |
It had been argued that automatic teller machines (ATMs) were branches and
therefore subject to laws restricting branch banking but the Court rejects this
argument.
p 542 |
|
1985 | Savings and Loan Association crisis starts |
A run on thrifts in Ohio and Maryland leads to the insolvency of their
state-chartered deposit insurance agencies.
p 534 |
|
1985 | EEC agrees to a Single European Act |
The aim is to create, by the end of 1992, a unified economic area in which
goods, services, people and capital would be able to move freely.
p 448 |
|
1986 | Federal Savings and Loan Insurance Corporation declared insolvent |
Large losses by thrifts in Texas and elsewhere lead to the FSLIC's insolvency.
p 534 |
|
1986 | British building societies get new banking powers |
The Building Society Act gives them greater freedom, allowing them to become
public limited companies if they wish. For some this is a first step towards
becoming fully fledged banks.
p 428-429 |
|
1986 | London Stock Exchange's Big Bang |
The Stock Exchange is opened up to new competitors and at the same time a new
system of automated operations is introduced. These changes coincide with a
great boom.
p 433 |
|
1987 | US Competitive Equality Banking Act |
An injection of $10.8 billion under the terms of this act keeps the Federal
Savings and Loan Insurance Corporation in existence.
p 534 |
|
1987 | The Great Crash |
A fall on Wall Street reaches record levels on Friday 16 October. The same
evening a hurricane sweeps over southern England and on Black Monday the
London Stock Exchange suffers a similar fall to the one on Wall Street. Fearing
that this crash, like the Wall Street Crash of 1929, might cause a world-wide
slump the world's monetary authorities increase the money supply.
p 433-435 |
|
1987 | Japanese trade surplus reaches $87 billion |
This is higher in absolute terms than that previously recorded by any country.
Much of Japan's export earnings during the 1980s are used in the form of direct
and portfolio investments abroad particularly in the United States but also in
Britain as a gateway to the European Union.
p 590-591 |
|
1988-1990 | Housing boom in Britain |
Tax relief on mortgage interest, too many institutions lending too much credit,
and the diversion of personal savings into the housing market after the Great
Crash, all contribute to the boom.
p 435-437 |
|
1988 | 15 countries have debts greater than their GNP |
They range from Mozambique with debts of 399.7% of its GNP to Mali whose debts
are 100.8% of its GNP.
p 632,634-635 |
|
1989 | US Financial Institutions Reform, Recovery and Enforcement Act |
Following a worrying increase in bank failures on top of the shambles of the
savings and loan institutions, a new regulatory system is introduced.
p 536 |
|
1989 | Delors Report on Economic and Monetary Union |
The report contains a three-stage plan for the establishment of a single
currency for the European Community which will be administered by a European
System of Central Banks.
p 444,448-449,650 |
|
1989 | Collapse of communism in Eastern Europe |
Eastern Europe faces the challenge of restructuring command economies along
market lines, similar in some respects to the problems successfully tackled by
West Germany in its reforms of 1948. The scale of the investment needed raises
fears in developing countries that the needs of the Third World will be
ignored.
p 577,635,638 |
|
1990 | Reunification of East and West Germany |
The East German Ostmark is replaced by the Deutschemark in the ratio of 1 DM
for 2 OM for business and large personal holdings, and 1:1 for small personal
holdings.
p 452,577-578 |
|
1990 | Britain joins the European Exchange Rate Mechanism (ERM) |
The decision to join is motivated, at least in part, by Britain's repeated
failure to meet its money supply targets.
p 440-441 |
|
1990 - c.1998 | Negative equity as Britain's housing boom ends |
The collapse of the boom results in the phenomenon of negative equity as
house prices fall below mortgage obligations, especially in London and the
South East. This does have the effect of helping to curb inflation.
p 437,672 |
|
1990 | Japanese banks are the largest in the world; US has none in the top 20 |
In 1970 the 10 largest banks in the world were all American. Legal restrictions
on nationwide banking in the US have prevented its top banks from growing
sufficiently to match the biggest in other countries. The 4 biggest banks are
all Japanese, as are 6 of the top 10, 9 of the top 20, and 109 of the top
1,000.
p 543,580 |
|
1990 | Japanese banks have the largest foreign holdings in London |
The assets of Japanese banks in London are higher than those of any foreign
country and are around twice those of American banks.
p 581 |
|
1990 | New Zealand introduces inflation targets |
In pursuing an inflation target the monetary authorities are required to look
at money in a very broad context. Over the next few years New Zealand's lead is
followed by Canada (1991), UK (1992), Sweden, Finland, Spain and Mexico (1993).
p 651,671 |
|
1991 | BCCI in world's biggest banking fraud |
The Bank of England is forced to close the British branch of the Bank of Credit
and Commerce International, thus exposing a banking fraud bigger than any in
previous world history.
p 428,535,648 |
|
1991 | The dissolution of the USSR |
The former republics of the Soviet Union face similar challenges of
reconstruction to those of those of the eastern European countries following
the collapse of communism. Many subsequently introduce new currencies in the
early years of independence.
p 577,638,658 |
|
1992 | London maintains position as the world's leading foreign exchange centre |
In April London' daily foreign exchange turnover is $300 billion compared with
$192 billion for New York, and $128 billion for Tokyo. However the volume of
financial transactions completely dwarfs turnover in world trade (in 1989 a
report claimed the former was 25 times the latter) making exchange rates
volatile.
p 451 |
|
1992 | Maastricht Treaty on European Union signed |
Among the provisions of the treaty is a target date of 1999 for the creation of
a single currency.
p 454,649 |
|
1992 | Britain leaves the European Exchange Rate Mechanism (ERM) |
Massive international speculation, which hits different European currencies at
various times, forces Britain to leave the ERM. Subsequently British interest
rates are reduced substantially, helping to revive the economy. In retrospect
Black Wednesday (16 September) is luckily seen to be "white".
p 441,453 |
|
1992 | European single market comes into effect |
By the end of 1992 the European Union officially has a single market with no
barriers to capital, labour, goods or services. The inclusion of banking and
financial services in the single market increases the pressure for a single
currency.
p 448,454,545,649 |
|
1993 | European Exchange Rate Mechanism reorganised because of speculation |
After a number of currencies, especially the French franc, are the target of
speculation like that which forced Britain's departure from the ERM the width
of the official currency bands is increased greatly in order to preserve the
system.
p 453,579,650 |
|
1993 | Frankfurt is chosen as the site of the European Monetary Institute |
This decision means that the future European Central Bank will also be sited
there.
p 454,580 |
|
1993 | Kyowa Credit and Anzen Credit rescued by Japanese Ministry of Finance |
This is the first such rescue operation carried out by the Japanese central
bank since 1927.
p 670 |
|
1994 | Nippon Trust Bank saved by Mitsubishi Bank |
Nippon Trust Bank is the latest victim of Japanese banking's mounting problem
of bad debts but it is saved by being taken over by Mitsubishi Bank.
p 670 |
|
1994 | Sumitomo Bank, the world's biggest, makes a loss |
This is the first time in 50 years that any of the largest Japanese banks have
declared a loss.
p 670 |
|
1995 | Kobe earthquake |
A devastating earthquake strikes Kobe in Japan on 17 January. Official funds
are extended to the Bank of Kobe. The effect of the earthquake on the Nikkei
225 index of leading Japanese companies brings about the downfall of Barings
Bank since Nick Leeson had risked enormous sums on the assumption that the
index would not move materially from its normal range.
p 665,670 |
|
1995 | Barings Bank fails |
Barings, which nearly failed over 100 years previously in 1890, is brought down
by the activities of the rogue trader, Nick Leeson, and taken over by
Internationale Nederland Groupe.
p 664-665 |
|
1995 | Daiwa Bank's New York branch loses $1.1 billion |
The losses are caused by illegal deals by Toshihide Iguchi.
p 670 |
|
1995 | By value over 90% of all transactions in the US are made electronically |
The high costs of cheque and coin payments is a strong motivating factor in the
development of electronic payment systems in the US and abroad.
p 661 |
|
1995 | Mondex electronic cash card introduced |
Trials of the Mondex smart card which is intended as a replacement for cash
begin in Swindon in Britain.
p 662 |
|
1995 | Mark Twain Bank adopts DigiCash |
This is an anonymous form of digital money developed by the cryptographer David
Chaum.
p 662 |
|
1997 | David Bowie issues Bowie Bonds |
The rock star issued bonds backed by the copyrights of his previously published
songs - a remarkable example of securitization of intangible assets and a
demonstration of the fungibility of money. See Who's Who in Bowie
Bonds.
Bowie bonds are not mentioned in "A History of Money" but Linda Davies, the daughter of the author of that work, is the author of Something Wild, a thriller which is the first novel on the subject of Bowie bonds.
|
|
1999 | European single currency is created |
On 1st January 1999 the Euro becomes the currency of 11 of the member states of
the European Union (Belgium, Germany, Spain, France, Ireland, Italy,
Luxembourg, the Netherlands, Austria, Portugal and Finland). Therefore Europe
enters the 3rd millennium with a new currency.
p 454,545,650,658,662-663 |
|
2002 | New Euro coins and notes are introduced by the European Union |
These replace the national coinages and banknotes of the
countries which adopt the new single European currency.
p 658-659 |
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