Eurodollar markets and Corporations: the early mechanics of capital supply and borrowing in the making of financial globalization under Bretton Woods and beyond
This contribution aims to explore the intertwining between the meteoric rise of unregulated Eurocurrency markets on world financial stage from the 1960s to the following decade and the starting and development of borrowing by U.S. and other Western corporations on the Eurocurrency markets. Since the early 1960s thereafter leading American and Western corporations began resorting to the Eurodollar markets either to finance their fixed capital investments or to fuel their international activities. As early as that time such borrowing patterns by corporate companies vitally contributed to the internationalisation of Eurodollar portfolios and to attract international investors to pour money into the City and other European financial centres used to trade Eurodollar assets. Therefore, the paper questions the hypothesis that central banks and LDCs countries represented the main borrowers in the early stage of Euromarket development. Likewise, it set in historical perspective the importance of the Eurocurrency markets in stabilising corporate investments and borrowing within the framework of industrial hiving off and monetary tightening that since the early 1980s forced the U.S. and Western corporations to set new borrowing patterns to fund their international investments at a time of high interest rates, declining stock markets, and a tottering U.S. dollar in foreign exchange markets.
This research is a work in progress and draws upon a wide array of monetary and banking archives from the United States (Federal Reserve Bank of New York historical Archives, HSBC archive Brooklyn, Rockefeller Archive Center, Tarrytown, NY, NYPL) which will be complemented as soon as possible, with further and deep research at monetary and banking archives in London and Manchester, by some research into the archives of American and other western corporations and into the archives of the NYSE. It aims at providing both a quantitative assessment about such intertwining and a qualitative reconstructions of these dynamics.
