The international monetary market has a long history of development. With the development of interstate relations market of foreign exchange transactions is also gradually changed. Gaining market of modern features began in the 70-ies of the 20 century, when it was removed, the system of fixed exchange one currency against another. After the termination of the Bretton woods system and the transition to a flexible exchange rates" the currencies of a new kind of business, which is based on obtaining profit in conditions of constant changes of exchange rates.
the Main stages of development of the world financial market
the 30s of the XX century
the World financial crisis. There is a destruction of trade and economic ties. To the middle of the 30s, London is becoming a global financial center. The British pound was the main currency for trading operations and the creation of currency reserves.
in 1930 In the Swiss city of Basel was established Bank for International Settlements. The purpose of creation was to financial support of young independent States, temporarily experiencing balance of payments deficit.
In the United States was the Bretton woods conference. It is considered the end of the us-British rivalry. The conference was attended by two major figures: John Maynard Keynes, England, and Harry Dexter white (USA). They are able to create and adopt new order the development of the world financial system under the prevailing conditions.
the Main provisions of the Bretton woods system
the international monetary Fund becomes important institution controlling the international financial and economic relations;
the Declared exchange, playing the role of international reserves (dollar and de facto pound sterling);
Set adjustable purchasing currencies pegged to the US dollar (possible deviation 1%); dollar is pegged to gold (ounce of gold at $35);
the IMF Members have the right to change the par values only with the agreement of the IMF;
at The end of the transition period, all currencies should become convertible; to follow this principle all governments undertake to keep international reserves, and if necessary - to intervene in the currency markets.
a member of the IMF donate currency and gold.
To pause the coming of communism, in the USA accept the program of recovery of the European economy. U.S. Secretary of state Marshall in his report outlines a plan under which Europe's economy recover to a level at which it can maintain its military potential. One of the tasks is quenching the "dollar hunger". If in 1949 dollar liabilities USA Europe amounted to 3.1 billion, in 1959 they reached 10.1 billion.
the Majority of European countries announcing the free convertibility of their currencies.
Japan announced the convertibility of its currency.
After the announcement of the convertibility of the major currencies became clear that the US is not able to maintain price of $35 per ounce of gold. Dollar inflation was a threat to the United States. The Kennedy administration had adopted a series of wrong actions - a tax on the interest rate differential, which increases the costs of foreign borrowers, and the program of voluntary limitations on foreign loans. Tax and restrictions triggered the emergence of a new market - the market евродолларов.
the devaluation of the British pound, which dealt the final blow to the illusory stability of the Bretton woods system. In 60th years of U.S. balance of payments deficit leads to a reduction in gold reserve from 18 to 11 billion dollars. Simultaneously with the increase of the external debt of the USA.
In the USA, the sharply reduced interest rates, which generates the strongest crisis of the dollar. For a short period of time there is a massive outflow of capital from the US to Europe, where the level of interest rates was higher.
Germany and Holland announce the temporary floating their currencies.
the Growth of the U.S. current account deficit has forced President R. Nixon suspend the convertibility of dollars into gold.
At the meeting in Смитсонианском Institute in Washington has attempted the last attempt to preserve the Bretton Woods system. Interval deviations of exchange rates from parities was increased to 4.5%. Keep limit of the interval was very difficult. And some time later the Bundesbank intervened in the amount of 5 billion dollars. This was a huge sum in those days, but the success of this to no avail. Currency exchanges in Europe and Japan, had to temporarily close, and the USA have announced the devaluation of the dollar by 10%. Developed countries stopped supporting fixed purchasing and resumed their currency float.
the U.S. gradually abolishes the tax on the interest rate differential and the program of voluntary limitations on foreign loans.
the Bretton woods system had ceased to exist. In recent years, the Bretton woods system of currency traders to reap the most speculative profit in the periods following the termination of Central Bank intervention. After the refusal from fixed rates to extract such profit has become severely limited. Many banks have suffered significant losses, and two well-known "Банкхаус Херштадт" in Colon and "Person national" in new York - even gone bankrupt because of failed speculative operations.
The Jamaican conference (Kingston). Representatives of leading world States to develop new principles of formation of the Global monetary system. The state abandoned the use of gold as a means of covering the deficit at the international payments. The main elements of the new system perform inter-state organizations, regulatory currency relations, convertibility of currencies. Means of payment are national currencies of the member. The main mechanism through which the international currency transactions are commercial banks.
Created the European monetary system (EMS). The core of the EMU is the net cross-currency exchange rates of Central and boundary values of exchange rates. In General, the EBU reminds Bretton woods. If the cross-rate close to the border, both sides are obliged to carry out интервенцию.Ключевая currency of the EMU дойчмарка.
Gradually ECU is not counting and physical instrument. Issued denominated in ECU travelers checks and credit cards, banks open deposits in ECU.
the Formation of the European monetary system. The agreement on its establishment was ratified by 9 parties members of the European community. The purpose of the EMS is an attempt to protect the currencies of the member States of the EEC by sharp fluctuations in exchange rates. From 9 signatories only 7 were full members: West Germany, France, Netherlands, Belgium, Luxembourg, Denmark, Ireland. Great Britain did not participate in the adoption of all documents, Italy joined them on certain conditions. Simultaneously with the creation of EMU introduced a new currency - the ECU. Goal - the creation of a means of payment within the EMS, and eventually, the replacement of national currencies. The ECU was a basket of the currencies of the countries participating in EMU. Currencies limits were established relatively to their Central values in the amount of 2.25%, for the Italian Lira - 6%.
To the European monetary system joined Greece.
In the European monetary system, enter Spain and Portugal. The Spanish peseta limits were established fluctuations in the amount of 6%.
the United Kingdom joined the exchange rate Mechanism, which was developed within the EMU, with the rate of the pound against the German mark 2.9500. West Germany (FRG) and East Germany (GDR) have United in a unified Germany.
In the Dutch city of Maastricht, the 12 member States of the European monetary Union signed a new Treaty of the European Union. In the basis of this contract lay the Treaty of Rome of 1957. In the Maastricht agreement were outlined guidelines to create a single European market, the European Central Bank, common currency, a common economic policy.
hard times for the European currency. Was the famous fall of the pound. During aggressive sales pound on the exchange market, the Bank of England and other members of the exchange rate Mechanism tried to keep him in the valid range of fluctuations with the assistance of operations on the market. However, all their efforts have not led to the desired result. Then the Bank of England was forced to raise the discount rate three times in one day in the amount of 5%, seeking to prevent the reduction of the pound. But this measure did not help and the pressure on the pound continued. The famous financier George Soros famously played the cheaper pound and received huge profits when he saw that the pound will be able to retain the established Mechanism of exchange rate framework. Thus, the Bank of England was forced to withdraw its currency from the exchange rate Mechanism. The fate of the British pound is shared by the Italian Lira. It was announced that they are temporarily out of the exchange rate Mechanism.
the July 1993
the Output of the pound sterling from the exchange rate Mechanism has greatly influenced the movement of the European currency. All currencies felt a great pressure that led to significant movements in the direction of reduction in prices. An interesting story happened with the French franc. After the devaluation of European currencies, the French franc was the last bulwark of stability. And then the whole market jump on him in the hope that it must find the fate of other currencies. Remembering signed a bilateral agreement on cooperation, Germany could not leave Frank thing. Not only that, the Bundesbank participated in interventions on the currency market, but also, specifically to maintain the franc was carried out by the decrease of German interest rates. But even such desperate measures were not able to save Frank from strong price reduction. Owing to such Grand events in the currency market, in the framework of the exchange rate Mechanism was decided to increase the range of possible fluctuations of its constituent currencies from 2.25% and 6% to 15%.
European leaders agree to introduce the Euro in 1999 to countries that meet certain parameters largest the state budget deficit, public debt, inflation and interest rates.
is Determined by the appearance of the Euro banknotes.
specifies the appearance of the Euro coins and Euro-cents.
the European Commission recommends a list of the 11 countries that will become Euro: Germany, France, Italy, Belgium, Netherlands, Luxembourg, Ireland, Portugal, Spain, Austria, Finland.
the European Parliament approves the selection of the 11 States that will join the European monetary Union with the new Euro currency. Begins choice of candidate on a post of the head of the European Central Bank.
On the market, a new European currency, the Euro, which replaced the ECU. 11 European States have fixed exchange rates against the Euro. The European Central Bank started to manage the monetary policy of the European monetary Union (EMU).