| 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 |
|
| 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 |
|
| 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 |
|
| 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 |
|
| 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 |
|
| 1980 - ? |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| The value of foreign banks' assets in the US increases from $80 billion to $209
billion. |
| p 527 |
|
| 1984 |
| 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 |
| A run on thrifts in Ohio and Maryland leads to the insolvency of their state-chartered
deposit insurance agencies. |
| p 534 |
|
| 1985 |
| 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 |
| Large losses by thrifts in Texas and elsewhere lead to the FSLIC's insolvency. |
| p 534 |
|
| 1986 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 - ? |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 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 |
| 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 |
| Among the provisions of the treaty is a target date of 1999 for the creation of a
single currency. |
| p 454,649 |
|
| 1992 |
| 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 |
| 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 |
| 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 |
| This decision means that the future European Central Bank will also be sited there. |
| p 454,580 |
|
| 1993 |
| This is the first such rescue operation carried out by the Japanese central bank since
1927. |
| p 670 |
|
| 1994 |
| 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 |
| This is the first time in 50 years that any of the largest Japanese banks have
declared a loss. |
| p 670 |
|
| 1995 |
| 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, 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 |
| The losses are caused by illegal deals by Toshihide Iguchi. |
| p 670 |
|
| 1995 |
| 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 |
| Trials of the Mondex smart card which is intended as a replacement for cash begin in
Swindon in Britain. |
| p 662 |
|
| 1995 |
| This is an anonymous form of digital money developed by the cryptographer David Chaum.
|
| p 662 |
|
| 1999 |
| The target date for the creation of the single currency, for those members of the
European Union that join the scheme, is (ignoring any slippage) 1st January 1999, so
Europe will enter the next millennium with a new currency. |
| p 454,545,650,658,662,663 |
|
| 2002 |
| These are intended to replace the national coinages and banknotes of the countries
which adopt the new single European currency. |
| p 658-659 |
|
| |
