Assessing the Impact of World War I on the City of London
The interwar years saw the rise of New York to challenge London as the world's leading provider of financial services.� This paper will show that the current explanations fail to identify a key factor in New York's rise.� The City was prevented from operating a full capacity by a capital issues embargo, imposed by the Bank of England to support the pound.� As a result, New York was able to enter the sector with little competition from London, and expand rapidly to issue over half of the global capital exported abroad in the 1920s.� Without the embargo, this would not have been possible, as the London merchant banks were the most productive producers in the industry, a position built up over the previous half century.� This result challenges the consensus that the return to gold was good for the City.� The merchant banks suffered and lost business, suggesting that this policy was even more disastrous than is currently thought.
|Date of creation:||01 Oct 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.economics.ox.ac.uk/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicholas Crafts, 1998. "Forging Ahead and Falling Behind: The Rise and Relative Decline of the First Industrial Nation," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 193-210, Spring.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- Alan M. Taylor, 2003. "Foreign Capital in Latin America in the Nineteenth and Twentieth Centuries," NBER Working Papers 9580, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:oxf:wpaper:456. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise)
If references are entirely missing, you can add them using this form.