The Paradox of the 1970s

The Renaissance of International Banking and the Rise of Public Debt

Bibliographic Data

ID12858784
AuthorsCarlo Edoardo Altamura (0000-0001-7239-5695, University of Geneva, corresponding author)
Year2017
Volume15
Issue4
Pages529-553
Publication date2017-11-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Modern European History (JOURNAL)
Journal identifiersISSN: 1611-8944 • E-ISSN: 2631-9764
PublisherSAGE Publishing (PUBLISHER • US)
DOI10.17104/1611-8944-2017-4-529
OpenAlexW2773605304
LanguageEN
Citations received7

The Paradox of the 1970s: The Renaissance of International Banking and the Rise of Public Debt The 1970s is a paradoxical decade. On the one hand, it marked the gradual demise of the industrial society and the end of the «Golden Age» of capitalism. On the other hand, the decade saw the renaissance of international banking and finance after almost half a century of retreat, thanks to the explosive growth of the Eurodollar market. International banking, which had remained dormant since the 1930s, gradually re-emerged from its ashes as banking institutions started to reconsider their domestic orientation. The growth of the Eurodollar market and the process of banking internationalisation were crucially accelerated by the first oil crisis when private commercial banks replaced public institutions in the intermediation of capital flows between surplus and deficit countries with Eurobonds and, especially, Euroloans. Foreign borrowing provided a relief to nearly all the problems that the monetary and energy crisis had aggravated or created. The side effect to that panacea was the delegation of increasing power to the banking and financial sectors by «privatising» the monetary and financial circuit, and by tying once and for all the destiny of the developing world to the interests of commercial banks. The paper will address the paradox of the 1970s to argue that a clear link exists between the industrial crisis and the renaissance of finance

Economic policy · Economics · Eurodollar · Financial system · Interest rate · Political and Social Issues · Finance

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