Robert McCauley on the Global Domain of the Dollar and Threats to Its Dominance
Macro Musings with David Beckworth
00:00
The Euro Dollar Market Overseas
There were rules in sterling in those days that meant if you could turn your sterling nominally into dollars but with a forward transaction that really made them sterling, you can get a higher interest rate. So it was some sort of regulatory arbitrage that produced the dollar accounts in London in the first place and they were really just sort of sterling and drag. And so that version of shadow banking 1960s filed basically ate the lunch of the domestic dollar intermediation and London really arrived.
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