Discussion Paper No. 126

An Entry of a British Overseas Bank into theEurodollar Market in the 1950s: The Case of Bolsa

Ayumu Sugawara

August 2016

TOHOKU MANAGEMENT & ACCOUNTING RESEARCH GROUPGRADUATE SCHOOL OF ECONOMICS AND

MANAGEMENT TOHOKU UNIVERSITY
KAWAUCHI, AOBA-KU, SENDAI

980-8576 JAPANAn Entry of a British Overseas Bank into the Eurodollar Market in the 1950s: The Case of
Bolsa 1
Ayumu Sugawara 2 (Tohoku University)
The presence of eurodollar markets is considered as one of the significant characteristics of
the international financial system in the second half of the twentieth century. While early
eurodollar markets emerged across Europe, the largest market was and has been in London. It
is due to the establishment of the eurodollar market that London has been able to maintain its
position as the leading international financial centre, ranking only with New York, despite thedecline of the British pound as an international currency. 3
Historically, a variety of causes has been identified for the formation of the eurodollar
market, including the actions of banks from the communist world, domestic interest-rate
restrictions in the United States, and the United States international balance of payments
deficit. However, these factors do not explain why the eurodollar markets were concentrated
in London. Numerous reasons have been indicated for this concentration, such as the lack ofgovernment restrictions on acceptance of foreign deposits and activities of merchant banks in
London. 4 These reasons have been stated from the perspective of elucidating the advantagesof the international financial market in London as well as the banks in the City.
According to conventional wisdom and analyses focused on Britain, the first factor that was
believed to have lead to the expansion of the eurodollar market in London was the prohibitionby the British government in 1957 of trade with other countries in pound sterling. A numberof British banks responded to this restriction by conducting eurodollar trade financing. 5
Although this viewpoint has been generally accepted, for a long period, there were no
attempts to elucidate the formation of the eurodollar market at the level of individual banks in
London due to substantial limitations of available data.
However, Jones made it possible to study the actions of leading banks in the formation of
the eurodollar market in London from a new perspective by conducting advanced research ona previously overlooked category—British overseas banks. Using data from individual British
overseas banks, Jones clarified one portion of eurodollar market formation from a historicalresearch perspective. 6 In his study, he examined the role of the Bank of London & SouthAmerica (Bolsa), which also is the subject of this paper, as a pioneer in the formation
1

The author would like to express gratitude to Ms. Sara Millard, the Archivist of the Bank ofEngland and the Lloyds Banking Group and their staff members, Dr. John Booker (Former
Archivist), Ms. Karen Sampson (the Archivist), and Ms. Silvia Gallotti, for giving permission
to access to the records and for their advice and supports. This work was financially supported
by JSPS KAKENHI Grant Number 16K03766.
2
An Associate Professor at the Graduate School of Economics and Management, Tohoku
University, Sendai, Japan. Email: sugawara@econ.tohoku.ac.jp
3
From a wider perspective on British economic history, Cain and Hopkins emphasized the
expansion of the eurodollar market due to which London has been able to survive as a global
financial centre. Cain and Hopkins, British imperialism, pp. 292–3. On the decline of thepound, see the latest result, Schenk, The decline of sterling.
4
Recent reviews of past explanations of eurodollar market formation are found in Schenk,‘The origins of the eurodollar market’, pp. 223–34; Burn, ‘The state, the City and theeuromarkets’, pp. 229-31; Battilossi, ‘Introduction’, pp. 10-11; Schenk, ‘Crisis andopportunity’, pp. 207-10; Baker and Collins, ‘London as an international banking centre’, p.
256; Toniolo, Central banking cooperation, pp. 452–5.
5
Clendenning, The euro-dollar market, p.23.
6
Jones, ‘Competitive advantages’; idem, British multinational banking.
1

eurodollar market. The bank was established in 1923 with the merger of the London and River
Plate Bank with the London and Brazilian Bank. It was a British overseas bank whose mainline of business was the financing of trade between Britain and Latin America. In 1936, Bolsa
absorbed the Anglo-South American Bank, thereby making it the only British overseas bankin Latin America. 7
According to Jones, the main reason for Bolsa’s early entry into the eurodollar market wasthat the bank faced a competitive disadvantage of being dependent on the pound sterling,
particularly in Latin America where most trade and investment was conducted in U.S. dollars
and American banks were rather active. 8 However, Jones considered Sir George Bolton, theerstwhile executive director of the Bank of England who became the chairman of Bolsa in
1957, as the engine of change towards the extensive use of the U.S. dollar. 9 Prior to
becoming the chairman of Bolsa, Bolton was a foreign exchange dealer in the 1920s and an
officer in charge of foreign exchange in the Bank of England after the 1930s. He expected thatthe international use of sterling would virtually cease; however, London had the uniquecompetitive advantage of having an agglomeration of worldwide financial services. 10 Bolton
established a new foreign exchange department in Bolsa with instruction for dealers to seek
deposits in foreign currencies in order to facilitate transactions in Latin America andEurope. 11Then, Schenk also conducted a study on the process of the formation of the London
eurodollar market, thereby increasing the level of research on this subject. Schenk clarified
the shares of eurodollar deposits by bank category during the eurodollar market’s formative
period 1962-3, which was previously unclear. Her study revealed that the share of eurodollar
deposits in British overseas banks was largely the same as those of merchant banks and theLondon branches of American banks, which had already been established as powerful players
in eurodollar market formation. 12 Subsequently, Battilossi extended Schenk’s findings andclarified the shares of various categories of banks in eurodollar deposits dating back to
1958. 13Further, Schenk revealed that the eurodollar market was not formed in 1957, as previously
believed, but in 1955; the first market participant was Midland Bank. Midland Bank began
accepting eurodollar deposits in order to respond to a situation in which there was a decreasein the amounts of deposits at clearing banks for the first time since the Second World War.
This was because funds were transferred from bank deposits to British treasury bills due to anincrease in the interest rate on treasuries at the end of February 1955. 14 Thus, Schenk’s
approach provided a direction for explaining the formation of the eurodollar market throughempirical and, in particular, quantitative information of the business requirements ofindividual banks at the time.
In light of the above discussion, the subject of this paper is to elucidate the main causes of
Bolsa’s early participation in the formation of eurodollar markets, with a particular focus on
Jones’ findings. His findings can be said to have provided an indication of important facts. In
particular, very little quantitative information is provided on Bolsa’s eurodollar business and7

Joslin, A century of banking; Holley, ‘Bolsa under Sir George Bolton’.
Jones, ‘Competitive advantages’, pp. 51–2; idem, British multinational banking, p. 264.
9
Jones, British multinational banking, pp. 264–5.
10Ibid., pp. 264–5.
11
Ibid., p. 325; Fry, A banker’s world, p. 32.
12
Schenk, ‘The origins of the eurodollar market’, p. 230.
13
Battilossi, ‘Banking with multinationals’, p. 106, tab. 5.1.
14
Schenk, ‘The origins of the eurodollar market’, pp. 224–9; Economist, 19 Feb. 1955, p.
666, 26 Feb. 1955, p. 758, and 5 March 1955, p. 846.
82

eurodollar market conditions. Thus, Bolsa’s financial documents stored in Lloyds Banking
Group Archives have been used. As done by Schenk, we explore the formation of theeurodollar market by focusing on the business necessities of individual banks.
In order to conduct this study from an analytical perspective, we utilise the bank internalfunds circulation approach given by Nishimura in his research on HSBC. 15 In his study,
Nishimura clarified the roles of each branch of HSBC in 1913 by reconstructing branchbalance sheets and indicating their financial surpluses or deficits.
The period under study in this paper is 1957-63. The reason that this period is considered is,firstly, because information on Bolsa’s eurodollar business can be found in the bank’s
financial records for this period. Secondly, it was in 1957 that the British government
prohibited trade financing in pound sterling between countries other than Britain. Prior to
Schenk’s study, the eurodollar market was considered to have been established in 1957. The
impact of the prohibition is significant from the viewpoint of international finance,
particularly with regard to the substitution of sterling with dollar. Finally, in 1963 a number ofmajor changes took place in the banking industry: an increase in the maximum interest rate
permitted under Regulation Q, the announcement of eurocurrency market statistics by the
Bank for International Settlements, the collapse of certain firms that participated in eurodollar
markets, and the appearance of the eurobond market.
The remainder of this paper is organized in the following manner: In Section I, we identify
the size of the eurodollar market 1957-63, scale of eurodollar deposits according to bankcategory, and scale of Bolsa eurodollar deposits. In Section II, we present a quantitativedescription of the impact of Bolsa’s participation in eurodollar markets on Bolsa’s
management structure. In Section III, we describe the content of the eurodollar business of
Bolsa’s London branch. In Section IV, we analyse the main causes that led to Bolsa’s earlyparticipation in the eurodollar market. In Section V, the conclusion, we indicate therelationship between the results of the analysis in this paper and the findings of Schenk’s
study.
I
In 1964, the Bank of England began preparing statistics on the size of the London eurodollar
market. 16 This clarified the scale of the foreign currency liabilities of banks in London at theend of 1957 and later. These data are depicted in figure 1, which reveals that banks in London
carry foreign currency liabilities of approximately £71 million at the starting point. According
to the Bank of England, in around 1955, the foreign currency liabilities of London banks wereapproximately £50 million. 17 This figure reached approximately £1.75 billion by the end of
1964, as the eurodollar markets grew rapidly. 18
Figure 1
15

Nishimura, ‘The flow of funds’.
The statistics in figure 1 are overestimated as compared with statistics for subsequent years,
such as the figures cited in table 2. However, the author uses the older estimation because of
consistency with the data prepared by Bolsa’s staff in the bank’s documents.
17
Bank of England, ‘U.K. bank’s external liabilities’, p. 101.
18
The eurodollar market constituted a part of the Eurocurrency markets. Hereafter, in thispaper, we will limit our discussion to the eurodollar market. Moreover, we will use the term
eurodollar market in cases that, strictly speaking, should be referred to as eurocurrency
markets. Separate study is required to identify the causes of growth in non-dollar
eurocurrency markets.
16

3

Figure 2 illustrates the trends in the amount of foreign currency deposits at Bolsa’s London
branch. It is believed that in 1957 the London branch held foreign currency deposits
amounting to approximately $2–3 million. 19 Thereafter, foreign currency deposits continued
to grow rapidly, rising from $3.7 million in September 1957 to $106.2 million in December
1958, $190.9 million in December 1959, $281.7 million in December 1960, $351 million in
December 1961, and $444.7 million in December 1962. However, in December 1963, thevalue of these deposits fell year on year to $420.8 million, and were at $471.7 million in
December 1964. The data for March 1961 and a separation of dollar deposits from those inother currencies indicate that approximately 80 per cent of the London branch’s foreign
currency deposits were dollar deposits.
Figure 2
However, the question that remains is what was the share of the London branch’s foreign
currency deposits in the entire London foreign currency deposit market? Table 1 presents
Bolsa’s share in the London foreign currency deposit market from a comparison of figures 1
and 2. It is evident from table 1 that Bolsa’s shares in 1958 and 1959 are exceptional. In
subsequent years as well, Bolsa continued to maintain a fairly large share of foreign currency
deposits for a single bank—at 15 per cent or more in 1960–2 and 11 per cent in 1963. 20 Thus,
Bolsa came to be considered a leading bank in the eurodollar market, which is evident fromtable 1.
Table 1
Table 2 presents information on the proportion of foreign currency deposits of banks invarious categories for the period 1957-63. Ranked by bank category, in 1958, British overseas
banks had the highest share, followed by British clearing banks. In 1959, foreign banks otherthan U.S. and Japanese banks slightly exceeded the share of British overseas banks, which
continued to maintain a 25 per cent share. After 1959, British overseas banks were surpassed
by U.S. banks but retained the second place, followed by accepting houses and other foreignbanks. However, as seen above, Bolsa held a large amount of foreign currency deposits
independently; Bolsa’s share of foreign currency deposits among British overseas banks was
80 per cent in 1961, 67 per cent in 1962, and 53 per cent in 1963. 21 For this reason, it may bestated that the reference to British overseas banks in the context of the foreign currency

19‘London branch U. S. dollar deposits’, 21 Dec. 1961, F2/D, LA (hereafter LA).
The estimation of Bolsa’s staff of the bank’s shares in the London Eurocurrency markets
were 15.5% in Dec. 1962, 12.2% in Dec. 1963, and 10.3% in Sept. 1964. ‘London branch
U.S. dollar deposits’, Jan. 1965, LA, F2/D/Rep.8.
21This has been estimated using the following procedure: For estimating the size of
eurocurrency deposits in British overseas banks, use the data presented in figure 1 as the total
amount of eurocurrency deposits in London and the data presented in table 2 as the shares ofdifferent banks in London. Then, the sizes of the eurocurrency markets are multiplied by the
eurocurrency shares of British overseas banks in each year in the period 1958-60. However,this procedure is not appropriate because the data presented in table 2 for the period only
deals with eurodollar deposits, while the data on Bolsa’s foreign currency deposits that is
prepared by the bank’s staff only indicates the total eurocurrency deposits before 1961, as isshown in figure 2.
20

4

deposit market is largely the same as referring to Bolsa. 22
Table 2
However, Bolsa was a relatively small bank as compared to other British overseas banks. In
1955, Bolsa’s rank among British overseas banks in terms of balance-sheet size had fallen toseventh place from fourth place in 1948. While the total assets of other British overseas banks
increased, those of Bolsa decreased. From the end of the 1940s to the first half of the 1950s,
Bolsa had faced tough conditions in Latin America. 23 Bolsa’s amount of deposits fell in 1954
and then remained stagnant until 1957.24 However, these deposits began to increase in 1958,
and by 1964, the bank was ranked sixth in terms of total assets. Despite the fact that it was
small in comparison to other leading overseas banks such as HSBC and the Chartered Bank,
Bolsa became a key player in the initial eurodollar market. Banks that were also regarded bycontemporaries as important players in the eurodollar market in its formative years included
Schroder, Kleinwort Benson, Brown Shipley (merchant banks), Société Générale (Frenchbank), and ANZ (British overseas bank). 25 In addition, Hambros which was also merchantbank began releasing its amount of foreign currency deposits in 1955. 26 From the above
discussion, it is evident that it is appropriate to focus on Bolsa when attempting to clarify theprocess of formation of the eurodollar market in London.

II
The acceptance of large amounts of eurodollar deposits had a significant impact on Bolsa’s
business conditions. Figure 3 presents the trends in the foreign currency and total amount ofdeposits at the London branch. What is most apparent from figure 3 is the fact that foreign
currency deposits had come to account for the bulk of deposits at the London branch. The factthat most of the deposits at the London branch during this period were foreign currency
deposits indicates that the rapid increase in foreign currency deposits itself represented a rapid
increase in the overall deposits at Bolsa’s London branch.
Figure 3
In this section, we identify the changes in Bolsa before and after the formation of theeurodollar market by comparing data for the years 1955, 1960, and 1963. Table 3 presents
Bolsa’s total deposits in branches of various countries in 1955: deposits in the London branch
totalled £11.18 million, or 13.5 per cent of the total; deposits in the Spain branch were at£17.32 million (20.9 per cent), those in the U.S. branch were at £13.54 million (16.3 per cent),
and those in the Brazil branch totalled £10.2 million (14.2 per cent). Thus, it is evident thatthe deposits in the London branch were the smallest among the worldwide branches of Bolsa
in 1955.

22

Schenk noted that in 1962 Bolsa had approximately 40% share in Eurocurrency deposits ofBritish overseas banks. Schenk, ‘The origins of the eurodollar market’, p. 231.
23
Jones told ‘by 1949 Bolsa’s ability to raise deposits in many Latin American countries wasstrictly limited’. Jones, ‘Competitive advantages’, p. 51.
24
Jones, British multinational banking, app. 5.
25‘The eurodollar market’, 16 March 1962, LA, F2/D/Rep. 8.
26
Altman, ‘Recent developments in foreign markets’, p. 69.
5

Table 3
This country-wise distribution of deposits fluctuated considerably from 1955 to 1960. In
1960, the amount of deposits in the London branch increased to £90.31 million, or 45.1 percent of the total, making it the central source of funds for Bolsa. The rapid increase in deposits
at the London branch was extraordinary even in the context of Bolsa. After the London branchcame the Argentina branch at £26.99 million (13.5 per cent) and the U.S. branch at £14
million (7.0 per cent). Subsequently, the share of the London branch experienced further rapid
growth, with its deposits totalling £242.39 million (74.3 per cent) in 1963. Thus, it is evident
that it was the London branch that accepted most of Bolsa’s deposits. The rapid growth ineurodollar deposits at the London branch established the branch’s centrality among branches
within Bolsa as a whole. However, the London branch became the central source of funds for
Bolsa much later than the London branches of other British overseas banks. 27
The fact that the London branch had become a central source of funds for Bolsa may be
confirmed from other indicators as well. Firstly, examining the size of the balance sheets
indicates that at the London branch this figure increased 12.4 times from £11.07 million in1955 to £136.98 million in 1960. 28 While the deposits in the London branch increased 8.1
times 1955-60, its balance sheet grew at a faster pace. Moreover, the London branch’s share in
the size of the balance sheet of Bolsa as a whole underwent a remarkable transformation from
7.9 per cent in 1955 to 55.8 per cent in 1960. 29 In 1963, the size of the balance sheet of
Bolsa’s London branch was £162.67, accounting for a share of 41.9 per cent of the entire
bank’s balance sheet. Thus, it is evident that the share of the London branch had fallen over a
period of three years. However, in 1963, the size of the head office balance sheet was £14.09
million from £12.95 million in 1960 and £17.97 million in 1955; 30 the head office was also
located in London. 31
This growth in the size of the London branch’s balance sheet is a clear indicator of the shift
in the centre of Bolsa’s business to the London branch. It must be noted that if only thedeposits of the London branch had increased, it would have indicated that the branch has
merely collected funding, with the funds perhaps destined for overseas branches; however, thegrowth in assets at the London branch indicates that the collected funds were utilized in
London as well. A detailed discussion of the use of these funds will be conducted at a laterstage in the paper.
Further, the growth in the size of the balance sheet of the London branch also markedly
increased the weight of the London branch in the bank’s profits. As is evident from table 4,
the London branch’s profits in 1955 were £196,000, or 15.6 per cent of the overall bankprofits; this figure increased to £684,000, or 29.5 per cent of the overall bank profits, in 1960.
Although the pace of growth in the profits of the London branch was slower than that of thegrowth in its balance sheet, in 1963 the branch’s profits amounted to £1.771 million, or 53.8
per cent of the overall bank profits. Thus, the contribution of the London branch to overallbusiness for Bolsa was significant in the period under consideration.
Table 427

Nishimura, ‘The flow of funds’, pp. 42–3, tab. 2.8. In 1913, the London branch of HSBC
had the largest balance sheet size and was the largest fund supplier to other branches althoughfinancial data on the bank’s Hong Kong head office is not available.
28‘Summary balance sheets’, Dec. 1955 and Dec. 1960, LA, F2/CA/Acc.2.
29
Ibid.
30
‘Summary balance sheets’, June 1963, LA, F2/CA/Acc.2.
31‘Summary balance sheets’, Dec. 1955 and Dec. 1960, LA, F2/CA/Acc.2.
6

III
Table 5 presents the state of the use of dollar deposits at Bolsa’s London branch 1960-4. The
use of dollar deposits was roughly divided into dollar re-deposits, dollar loans and overdrafts,
and term lending or pool funding after conversion to pound sterling. 32
Table 5What is most evident in table 5 is the fact that throughout this period the re-depositing of
unconverted dollars was the most common use of dollar deposits. However, this sharedisplayed a decreasing trend, falling from approximately 80 per cent in 1960 to 53 per cent in
1963. However, in 1964, the share of dollar re-deposits rose slightly to 64 per cent.
Table 6 presents a breakdown of dollar re-deposits at the London branch 1960-3. As isevident from this table, dollar re-deposits included those monies that were re-deposited withother banks as well as those re-deposited with other Bolsa branches; the re-deposits with otherbanks accounted for the bulk of dollar re-deposits.
Table 6
It must be noted that these interbank re-deposits were a central business in the eurodollar
market as a whole. Each bank that accepted eurodollars secured its interest-rate margin by
re-depositing them with other banks, and this resulted in a steady expansion of deposits.
However, the interest-rate margins were rather small, ranging from 1/8 to 1/32 of a point. 33
Even at Bolsa, such dollar re-deposits constituted the centre of the eurodollar business.
Next, in table 7 we provide a comparison of the geographical distribution of dollar
re-deposits for Bolsa and other banks in London as a whole. The distribution could becompared using detailed categories for 1964 only. The aspect that greatly differentiated thedestinations of dollar re-deposits between British banks as a whole and Bolsa was the fact thatthe weight of Latin America was 3 per cent for British banks as a whole and 13 per cent for
Bolsa. However, some of these dollars were distributed through deposits with banks ofrespective countries that were located in London, while others were distributed throughdeposits with banks located in their home countries.
Table 7
Further, dollar deposits with other branches, as is evident from table 8, provide a clear
picture of Bolsa’s business interests outside London. Branches that accepted dollar deposits
from London were the New York, Brazilian, Paris, and Buenos Aires branches. The scale ofthese deposits was largest at New York, where it ranged from $6 million to $11 million,
followed by Brazil where it ranged from $1 million to $7.38 million in the period from 1960
to 1964. Further, dollar deposits were placed with the Paris branch from December 1960 to
December 1961 and ranged from $900,000 to $9.82 million, and in the Buenos Aires branchfrom May to December 1962 and ranged from $500,000 to $1.65 million. These deposits may
be considered to represent the distribution of funds to branches that required dollars. The New
York branch used these dollar deposits for daily business operations and to comply with U.S.
cash reserve ratio regulations. The Brazilian branches used its dollar deposits to conduct swap
32
33

‘London branch utilisation of U.S. dollar deposits’, 11 Jan. 1965, LA, F2/D/Rep. 8.
Altman, ‘Recent developments in foreign markets’, p. 28.
7

transactions in order to obtain the then local currency, cruzeiro. Moreover, the Paris branchused its dollar deposits to obtain francs through swap transactions as well as to advance loans
in dollars. 34
Table 8Further, dollar loans and overdrafts by the London branch also indicate the characteristics
of Bolsa’s business transactions. Table 9 presents the following distribution of dollar loans
and overdrafts: Latin America accounted for 48.9 per cent at $24.32 million of the total
amount of $49.71 million, while Eastern Europe accounted for 15 per cent at $7.55 million,
and West Germany accounted for 5 per cent at $2.62 million.
Table 9The purposes of the loans and overdrafts to Latin America were to support Bolsa
subsidiaries and provide customers with services that could not be handled at branches. 35 The
recipients of Bolsa’s dollar loans and overdrafts included subsidiaries Compania Financierade Londres and Balfor Williamson, while customer recipients included Bonge & Born, SIAM
Di Tilla, Industrias Kaiser Argentina, Banco de A. Edwards, and Corporation Argentina deProductores de Carnes. 36 Compania Financiera de Londres was a subsidiary of Bolsa that wasestablished in 1961 for the purpose of industrial finance. It was owned by an Argentine boardof directors and managed by staffs of Bolsa branches in Argentina as well. 37 Balfor
Williamson was a British merchant bank bought in 1960 by Bolsa. It was active mainly inChile, Peru, Ecuador, Colombia, U.S. West Coast, and the Pacific Rim. 38
Overdrafts to Eastern Europe were allocated to finance the imports of Eastern European
nations from Latin America, while negotiation of bills was allocated to finance exports from
Eastern Europe to Latin America. Usance bills were valid for no more than six months. 39 The
provision of these loans and overdrafts brought foreign exchange business to Bolsa’s London
and Latin American branches. Moreover, while the share of loans to West Germany was small,numerous loans were advanced to West Germany in currencies other than the dollar as well as
combined dollar and other currencies loans; the total loan amount was $7.6 million. 40
Currencies included under ‘other’ are those of Britain, Austria, Japan, Luxembourg, andYugoslavia. 41
With regard to the criteria applied to identify borrowers other than Bolsa subsidiaries andkey customers, borrowers with top international creditworthiness or those who were able toobtain equivalent guarantees, and either affiliates of companies from hard currency countries
such as U.S., Japan, Australia, Britain, and Europe or those with dollar revenues were eligible
for receiving loans and overdrafts. 42
Part of Bolsa’s London branch dollar deposits was converted to pound sterling and thentransferred to term loans and London branch pool funds. The percentage of total dollar
34‘London branch U. S. dollar deposits’, 21 Dec. 1961, LA, F2/D.
‘London branch U. S. dollar deposits’, 17 Dec. 1963, LA, F2/D.
36
Ibid.
37
Joslin, A century of banking, p. 290.
38
Ibid.
39
‘London branch U. S. dollar deposits’, 17 Dec. 1963, LA, F2/D.
40
Ibid.
41
Ibid.
42
Ibid.
35

8

deposits accounted for by term loans in pounds increased in importance from approximately
15 per cent in 1960 to range from 11–20 per cent in 1961, 18–24 per cent in 1962, and 21–25
per cent in 1963. Thereafter, there was a slight decline in 1964 to the range of 15–20 per cent.
A breakdown of term-loan borrowers reveals that in October 1962 loans to banks and otherfinancial institutions totalled £16.05 million while those to British local governments
amounted to £7.25 million; in November 1963 the former category totalled £18.12 million
and the latter £11.95 million, and in November 1964 the former was £9.42 million and thelatter £13.4 million. 43
The borrowings by British local governments were an important structural element of theformative period of the eurodollar market. Eurodollar borrowing by the local governments
began in September 1955 because in that year the British government, for financial reasons,prohibited local governments from borrowing from the Public Works Loan Board. This
resulted in local governments borrowing large amounts of short-term funds. 44 Like otherbanks, Bolsa was also committed to this important business in the eurodollar market.
The factors responsible for the formation of the eurodollar market in London may beviewed in light of this demand for borrowing by local governments. 45 However, since themove toward intake of large amount of eurodollars converted to domestic currency as a resultof domestic financial conditions was a phenomenon that actually was seen in other countries
such as Italy, Japan, and the U.S., there is a room for further study to determine whether thispoint can be considered a key factor behind London becoming a leading eurodollar market.
Next, an examination of the pool funds of the London branch reveals that these funds were
diverted towards purchase of current assets by the branch. Specifically, these current assets
include brokers’ loans as well as treasuries, other gilt-edged securities, and short-term tradebills. 46
The above discussion reveals that in the London branch’s eurodollar business, dollar
re-deposits to other banks and pound term loans represented participation in important areasof the eurodollar market. Although such activities were undertaken in other banks as well,
Bolsa’s unique contribution is indicated in its use of dollar deposits for re-deposits in its
branches as well as for loans, overdrafts, and negotiation of bills to Latin America andEurope.
IV
Through the eurodollar business, Bolsa increased both its size and profits. In order to consider
the reasons for Bolsa’s early entry into the eurodollar market, the following four factors aretaken into consideration: Dollar deposits from the London branch to other branches,inter-branch balances, comments of the bank chairman in 1958, and Latin American externalfinance. The former two factors are elucidated in the first portion of this section and the latter
two facts are considered in the second portion.
In this regard, the following hypothesis is proposed to explain the reasons for Bolsa’s early
entry into the eurodollar market: Bolsa’s London branch first began accepting dollar deposits
in order to enable its Latin American branches to deal with shortage of funds. This was
because the dollar was convertible into Latin American local currencies and was used in the
United States.
43‘London branch U.S. dollar deposits’, 11 Jan. 1965, LA.
Schenk, ‘The origins of eurodollar market’, p. 228.
45
Grant, The machinery of finance, p. 140; Schenk, ‘The origins of the eurodollar market’,p. 228.
46‘London branch U. S. dollar deposits’, 11 Jan. 1965, LA.
44

9

Firstly, we consider the relationship between the London branch’s dollar deposits andBolsa’s internal flow of funds for the period 1960–3, for which information on dollar deposits
from the London branch to other branches is available. The dollar deposits supplied from theLondon branch to other branches in the end of each year are presented in table 10, which has
been created using table 8. We inter-relate the dollar flows and total flow of funds in Bolsa.
An examination of the inter-branch balances reveals Bolsa’s internal flow of funds, which arepresented in table 11 that has been created from information presented in the appendix. In thistable, we use balances by country, and add inter-branch balances for each country. The
negative values in table 11 and the appendix are for countries that were recipients of funding,while the other values are for countries that provided funding. It is evident from table 11 andthe appendix, that the U.S., Brazil, and the London head office were recipients of large
amounts of funds, while the London branch was the greatest fund provider. However, since
the head office was located in the same building as the London branch and accepted funds asadministrative charges, it was considered a non-business-performing division. Consequently,
the U.S., Brazil, and occasionally French branches accepted funds to conduct their business.
These findings are in agreement with the providers and recipients of dollar funds that havebeen mentioned in the available bank data. Now, we compare the figures for each country bycomparing tables 10 and 11.
Table 10
Table 11
Although Argentina received dollar deposits in 1962 only, this is unrelated to an excess or
shortage of funds in the country. During this period, Argentina was a provider of funding. On
the other hand, Brazil was a recipient of funds in every year except 1962. In 1962, when it
was a provider of funds, the amount of dollar deposits was low in the country. Throughout
this entire period, the U.S. was a receiver of funds as well as a receiver of dollar deposits.
France was a receiver of funds in 1960 and 1961 and a fund provider thereafter. Moreover,even in terms of dollar deposits it was a fund receiver in 1960 and 1961 but did not receive
any funds in subsequent years. Further, London was a provider of funds throughout the entire
period. Thus, it is evident from these findings that while there was no apparent relationshipapparent between dollar deposits and balance by country in the case of Argentina, both these
aspects were closely related in Brazil, the U.S., France, and London.
Next, we compare the amounts of funds supplied or received with the amounts of dollar
deposits in Brazil, the U.S., and France. The results are presented in table 12. It is evident
from the table that the bulk of funding shortages in each country was covered by dollar
deposits from London. The ratio of coverage by dollar deposits exceeded 100 per cent incertain cases because the figures for balance by country are net figures. Ordinarily, grossamounts received would be expected to be larger than net amounts.
Table 12Further, additional manipulation of the figures was conducted in order to derive the weightof dollar deposits as a part of the total amount of funds supplied by the London branch. It
supplied enormous amounts of funds, ranging from £8.3 million to £89.7 million. However, atthe same time, the head office also received enormous amounts of funds, ranging from £3.2
million to £82.5 million. Firstly, we assumed that the entire amount of funds received by thehead office came from the London branch. Then, assuming that the funds were received inpounds since the head office is also located in London we subtracted the amount received by
10

the head office from the amount supplied by the London branch. The remaining balance wasconsidered to represent the amount of funds supplied by the London branch to other countries.
Table 13 compares this amount with the amount of dollar deposits.
Table 13
It is evident from the above table that the London branch supplied funds by utilizing dollar
deposits. This may be considered a reasonable finding since most of the deposits received by
the London branch were in dollars. Thus, the above analysis indicates that 1960-3, most of thefunds supplied by London to Brazil, the U.S., and France was in dollars and was utilized forthe branches’ conduct of business.
Since figures on dollar deposits from the London branch to other branches are unavailable
for years prior to 1960, it is unknown whether supply of funds from the London branch tocountries that had a shortage of funds was conducted in dollars. Therefore, we must makeinferences regarding the years prior to 1960 using other available information. For this reason,
we examine a letter from Bolsa President Sir George Bolton to Deputy Governor Cameron
Cobbold of the Bank of England, written in 1958. 47 This letter indicates that Bolsa faced ashortage of funds due to the growth of its business and competition with local and foreignbanks in Central and South America. The letter states that the London branch of Bolsa
required funds in order to provide finance to Latin America for certain projects. A few specificexamples of such projects were £1 million in financing for a construction project in Brazil and£2 million for a construction project in Argentina. Further, Bolton also stated that Bolsa
required dollar funds for use in Central America as the region is part of a dollar-based system,
and Bolsa was facing stiff local competition in both lending and trade finance due to ashortage of funds. 48 This contention of Bolton was supported by the fact that in 1956,
manager of the Rio de Janeiro branch of Bolsa wrote to the head office in London andmentioned intensification of local competition and a shortage of cruzeiro. 49
Although Bolton directly mentioned the need for dollars in Central America, he did not
mention which currency Bolsa would use in Brazil and Argentina. However, it is rather likelythat supply of funds from London was conducted in dollars to Brazil and in pound sterling toArgentina. The first clue in this regard is provided in table 14, which indicates the currency
used in trade settlement with Latin America and Europe. In 1949, dollar settlement accounted
for 7 per cent of settlement with the group that included Argentina but 41 per cent with thegroup that included Brazil. Thus, dollar settlement accounted for a large share in Brazil’s trade
settlement with not just the U.S., but Europe as well.
Table 14The second clue is foreign exchange control definitions in Brazil. In 1952, Brazil included
the Belgian franc, Canadian dollar, Portuguese escudo, pound Sterling, Swedish krona, Swiss

47

The letter from G. Bolton to C. F. Cobbold, 7 Jan. 1958, The National Archives,
T/231/1192.
48
Ibid.
49
A letter dated 30 June 1956 and one dated Dec. 1956 from the Rio de Janeiro branchmanager to the head office. Both in ‘Extracts from managers’ reports on conditions andprospects’, LA, F2/D/Rep. 1. Further, a letter dated 31 Dec. from a manager in Venezuela andone dated 30 June from the manager in Montevideo also mentioned the intensification of local
competition. Ibid.
11franc, U.S. dollar, and Uruguayan peso among hard currencies. 50 However, in 1953 only the
U.S. dollar, Swiss franc, and Portuguese escudo were included in exchangeable currencies.
Therefore, it is evident that the U.S. dollar was necessary in Brazil for conducting banking
business. However, in Argentina, there was no such clear systemic statement of the status offoreign currencies.
Table 15
The third clue is Brazil’s foreign trade structure, which is presented in table 15. In the
1950s, Brazil’s foreign trade depended heavily on the U.S.: 38–54 per cent in exports and
26–45 per cent in imports. This could also be one of the reasons that Bolsa required the U.S.
dollars for trade finance in Brazil because, for example, when Brazilian importers took loans
from Bolsa for importing goods from the U.S., these loans were probably given in dollars;
moreover, when the importers used drafts on New York, the branch in the city had to havesufficient dollar funds to pay to exporters who brought the drafts to the New York branch. 51
The latter case can partially explain the why Bolsa’s New York branch required a large
amount of dollar funds because the New York branch’s dollar funds were paid drafts not only
from Brazil but also from all countries where Bolsa had business connections in the form of
branches or business correspondences. On the other hand, when New York importers asked
for loans from Bolsa’s New York branch for imports from Brazil, these loans also had to beadvanced in dollars. This case also can explain the reasons for the dollar demand in the New
York branch and can be extended to cases of imports from countries other than Brazil. Thus,
the above analysis on the letter from the chairman of Bolsa and the external financial structureof Latin America leads to the conclusion that even in the period from 1957 to 1959, Bolsa
required U.S. dollars to finance foreign trade. This was particularly important since the bankhad businesses in the U.S. and Latin American countries, in particular, Brazil under thesituation that using pound sterling was banned for trade finance between third countries.
Therefore, it may be concluded that the Bolsa’s London branch accepted eurodollars inorder to supply funds in dollars to branches in countries where financial transactions were
dominated by the U.S. dollar, such as Central America, Brazil, and the U.S. Moreover, it has
been established that Bolsa had sufficient motive for prompt action in accepting dollar
deposits as compared with banks that were not active in North and South America.
V
In the concluding section of this paper, the relationship between this paper’s findings andthose of Schenk’s study are considered. Schenk clarified that in 1955 Midland Bank was thefirst participant in the eurodollar market. She described the activities of Midland Bank ascorresponding to those in the market creation stage of Llewellyn’s model of financial
innovation. 52 In this stage, the scope of utilization of new financial products is narrow, andthe number of firms using them is small as well. 53 The market creation stage is followed by
the spread of innovation stage. New financial products have a life cycle similar to that ofmanufactured products. However, in the case of financial products the period during which
the innovating firm can enjoy the benefits of being the first to market is even shorter than in
50

IMF, Report on exchange restrictions, 1952, p. 51 and 1953, p. 80.
On procedures of trade finance between branches of international banks, see Nishimura,‘The flow of funds’, pp. 27–29.
52
Llewellyn, ‘Financial innovation’, p. 16.
53
Schenk, ‘The origins of eurodollar market’, p. 226.
51

12

the case of manufactured products. The main causes of this are the fact that the initial costs ofintroducing new financial products are relatively low and it is difficult to restrict access to thecontent of new financial products. 54 In the section of her paper entitled ‘spread of innovation’,
Schenk argues that Midland Bank’s initial advantage in the eurodollar market was lost over ashort period. It is conceivable that the argument in ‘spread of innovation’ could apply to Bolsa
as well. Table 1 indicates that Bolsa’s share in the eurodollar deposits market was on adecreasing trend.
Thus, both Midland Bank, as seen in Schenk’s study, and Bolsa, as seen in this paper,
entered the eurodollar market early and on a large scale due to the special factors of aworsening liquidity ratio (in Midland Bank’s case) and shortage of local Central and SouthAmerican currencies (in Bolsa’s case). Each of these two examples demonstrates the uniquecharacteristics of the market creation stage. Moreover, both these banks have in common thefact that in the stage in which the size of the market grew and the anonymity of market
participants expanded, they were unable to continue holding large market shares.
One unique characteristic of the case of Bolsa when compared with Midland Bank is thefact that the special factor responsible for Bolsa’s entry into the market was related tointernational finance. The case of Bolsa is indicative of the fact that the City of London could
survive as an international financial centre by combining its extensive financial network and arising international currency, the U.S. dollar, with a confirmation from the viewpoint of therequirements of international banking business. However, Bolsa’s business accounted for alimited share of the international banking business and financial agglomeration in the City of
London. Therefore, it is necessary to study the cases of other initial market participants in the
eurodollar market and compare the case of Bolsa to its competitors in the future.

54

Ibid., p. 229.
13

Appendix
Bolsa’s inter-branch accounts by country (£ thousand)
1951
1952
1953
1954
Argentina
-1300
-1400
-1200
-2200
Brazil
-2600
-2400
-2100
-500
U.S.
-3600
-2900
-2200
-1800
London
3900
1600
1200
4700
Head office(in London)
-900
-80
-600
-4100
Chile
100
-900
900
200
Paraguay
100
70
300
80
Peru
100
9
50
6
Uruguay
-300
-30
-50
100
France
-100
-90
-200
-30
Portugal
-60
30
70
90
Spain
50
300
200
70
Bradford
400
400
300
300
Manchester
-40
100
100
-20
Colombia
-30
-30
-30
-300
Ecuador
-6
-30
-10
-60
Guatemala
10
100
50
10
Nicaragua
-30
-80
-20
-30
El Salvador
700
70
100
300
Venezuela
100
8
30
-10
Total
-3000
-3400
-2900
-3100
1958
400
-1200
-2900
-200

1959
2200
-2100
-1700
6900

1960
10
-2800
-1600
18100

1961
1400
-1100
-5100
8300

1955
-3100
-500
-2000
4600

1956
600
-1100
-1600
5700

1957
-800
-1200
-2900
4900

-4500
80
400
-20
100
-10
-5
-80
200
10
40
-3
70
-3
300
70
-4300

-5200
80
100
-200
100
100
-10
-60
70
-10
-100
-10
70
-10
200
-50
-1200

-1900
200
100
-30
300
90
60
100
80
-70
300
40
700
-10
100
-50
-5900

1962
800
70
-7100
35700

1963
1200
-700
-6500
89700

Argentina
BrazilU.S.
LondonHead office(in London)
2900
-4900
-13200-3200-28600-82500
Chile
-50
-40
100
-50
-900
-70
Paraguay
-60
-200
-300
-600
-300
-200
Peru
20
0
-1
-30
-40
20
Uruguay
400
600
200
100
-200
100
France
100
-400
-1000
-200
40
2
Portugal
50
100
100
200
60
100
Spain
20
-10
-200
100
400
600
Bradford
-70
-90
-70
-200
-400
-900
Manchester
20
10
300
10
-3100
-3100
Total
-1000
300
-400
-400
-3700
-2300
Notes:a‘-’ (minus) indicates liabilities; other figures indicate assets. For this reason, negative values are forcountries that are fund recipients and other values are for countries that are fund providers.
b
All branches in Colombia, Ecuador, Guatemala, Nicaragua, El Salvador, and Venezuela were14

transferred to the Bank of London and Montreal, which was established as a joint venture of the Bankof Montreal and Bolsa in 1958.
Source: ‘Summary balance sheets’, each year, LA, F2/CA/Acc.2.

References
Altman, O., ‘Recent developments in foreign markets for dollar and other currencies’, Staff
Papers, 10 (1963), pp. 48-96.
Baker, M. and Collins, M., ‘London as an international banking centre, 1958-1980’, in Y.
Cassis and É. Bussière, eds., London and Paris as international financial centres in thetwentieth century (Oxford, 2005), 247-63.
Bank of England, ‘U.K. bank’s external liabilities and claims in foreign currencies’ Quarterly
Bulletin, 4(2) (1964), pp. 100-8.
Battilossi, S., ‘Introduction: international banking and the American challenge in historicalperspective’, in S. Battilossi and Y. Cassis eds., European banks and the American
challenge (Oxford, 2002), pp. 1-35.
Battilossi, S., ‘Banking with multinationals: British clearing banks and the euromarkets’
challenge’, in S. Battilossi and Y. Cassis eds., European banks and the American challenge(Oxford, 2002), 103-34.
Burn, G., ‘The state, the City, and the euromarkets’, Review of International Political
Economy, 6(2) (1999), pp. 225-61.
Cain, P. J. and Hopkins, A. G., British imperialism: Crisis and deconstruction 1914-1990(1993).
Clendenning, E. W., The euro dollar market (Oxford, 1970).
Economic Commission for Europe, ‘European trade with Latin America’, Economic Bulletin
for Europe, 2(3) (1950), pp. 18-49.
Fry, R., A banker’s world: the revival of the City 1957-1970, (1970).
Grant, A. T. K., The machinery of finance and the management of sterling (1967).
Holley, H. A., ‘Bolsa under Sir George Bolton’, in R. Fry ed., A banker’s world: the revival of
the City 1957-1970 (1970), pp. 202-19.
Jones, G., ‘Competitive advantages in British multinational banking since 1890’, in idem ed.,Banks as multinationals (1990), pp. 30-61.
Jones, G., British multinational banking 1830-1990 (Oxford, 1993).
Joslin, D., A Century of banking in Latin America: Bank of London & South America Limited
1862-1962 (Oxford, 1963).
Llewellyn, D., ‘Financial innovation: a basic analysis’, in H. Cavanna, ed., Financial
innovation (1992), pp. 15-51.
Nishimura, S., ‘The flow of funds within the Hong Kong and Shanghai Banking Corporationin 1913’, in O. Checkland, S. Nishimura, and N. Tamaki eds., Pacific banking, 1859-1959(New York, 1994), pp. 24-51.
Schenk, C. R., ‘The origins of the eurodollar market in London: 1955-1963’, Explorations in
Economic History, 35 (1998), pp. 221-38.
Schenk, C., ‘Crisis and opportunity: the policy environment of international banking in theCity of London, 1958-1980’, in Y. Cassis and É. Bussière, eds., London and Paris asinternational financial centres in the twentieth century (Oxford, 2005), pp. 207-28.
Schnek, C.R., The decline of sterling: Managing the retreat of an international currency,
1945-1992 (Cambridge, 2010).
Toniolo, G., Central banking cooperation at the Bank for International Settlements,
1930-1973 (Cambridge, 2005).

15

Official publications
IMF, Report on exchange restrictions (1952)
IMF, Report on exchange restrictions (1953)
Naciones Unidas, Boletín económico de América Latina, Suplemento estadístico(1960, V)
Figure 1. Size of the London eurocurrency market (US$ million)
4000
3500
3000
2500
2000
1500
1000
500
0
1957

1958

1959

1960

US$

1961

1962

1963

All currencies

Notes:The graph presented above uses the amount of foreign liabilities of banks in the U.K.
denominated in foreign currency.
b
The figures are for December of each year.
Source: ‘U.K. banks’ external liabilities’, p. 100.
aFigure 2. Eurocurrency deposits in Bolsa’s London Branch (US$ million)
500
400
300
200
100
0
1957

1958

1959

1960
US$

1961

1962

1963

1964

All currencies

Notes:
Data distinguishing US$ and other currencies are available only from 1961.
b
The figures in the graph are for Dec. of each year.
Source: ‘London branch U.S. dollar deposits’, Jan. 1965, LA, F2/D/Rep.8.
a16

Figure 3. London branch deposits (£ million)
300
250
200
150
100
50
0
1959

1960

1961

Foreign currencies

1962

1963

Total amountNote:
The figures in the graph are for June of each year.
Sources:1) Total amounts were prepared from ‘Summary balance sheets’, each year, LA,
F2/CA/Acc.2.
2) Foreign-currency figures were prepared from ‘London branch U.S. dollar deposits’, Jan.
1965, LA, F2/D/Rep.8.
Table 1. Bolsa’s share in the British eurocurrency deposit market
Year
Entire British banking
Bolsa’s eurocurrency
Bolsa’s sharesector (US$ million)
deposits (US$ million)
1957
198.8
10.6
5.3%
1958
358.4
106.2
29.6%
1959
756.0
190.9
25.3%
1960
1792.0
281.7
15.7%
1961
2111.2
351.0
16.6%
1962
2906.4
444.7
15.3%
1963
3584.0420.8
11.7%
Sources:
1) For Entire British banking sector, ‘U.K. banks’ external liabilities’, p. 100.
2) For Bolsa’s eurocurrency deposits, ‘London branch U.S. dollar deposits’, Jan. 1965, LA,
F2/D/Rep.8.

17

Table 2. Shares of eurocurrency deposits of banks in Britain (%)
1958
1959
1960
1961
1962
Clearing banks
22.5
14.3
11.1
6.6
4.5
Other British banks
1.0
1.3
1.5
1.1
2.6
British overseas banks
33.3
25.0
18.9
20.8
23.0
Accepting houses
10.8
10.7
11.8
16.1
18.6
U.S. banks
16.6
22.3
39.1
35.9
27.0
Japanese banks
0.9
6.0
7.3
10.8
Other foreign banks
15.8
25.5
11.3
12.2
13.5
Total
amount(£ million)
116
255
596
707
1027
Notes:a
All figures are for Dec. of each year, except those for 1963, which are for April.
b
The figures for 1958 to 1960 are eurodollar deposits only
Sources:
1) For 1958 to 1962, Battilossi, ‘Banking with multinational’, p. 106, tab. 5.1.
2) For 1963, Schenk, ‘The origins of the eurodollar market’, p. 230.
Table 3. Bolsa’s deposits by country (top five)1955£ million Percentage
Spain
17.3
20.9%
U.S.
13.5
16.3%
U.K.
11.7
14.2%
Brazil10.2
12.3%
Guatemala 5.3
6.4%

1960
U.K.
Argentina
U.S.
BrazilSpain£ million
90.8
26.9
14.0
7.9
6.8

1963
5.1
2.1
22.2
17.1
32.3
9.8
11.5
1147

Percentage
45.4%
13.5%
7.0%
4.0%
3.4%

1963
£ million Percentage
U.K.
242.9
74.5%
U.S.
25.8
7.9%
Argentina 23.2
7.1%
Spain
8.6
2.7%
Brazil8.3
2.6%
Sources: ‘Summary balance sheets’, Dec. 1955, Dec. 1960, and June 1963, LA, F2/CA/Acc.2.

18

Table 4. Bolsa’s profits by country (top five)1955£ thousand Percentage
U.S.
215
17.1%
U.K.
201
16.0%
Argentina 193
15.3%
Chile
174
13.8%
Spain
114
9.0%

1960
Argentina
U.K.
U.S.
BrazilSpain£ thousand
698
696
519
262
172

Percentage
30.1%
30.0%
22.4%
11.3%
7.4%

1963
£ thousand Percentage
U.K.
1811
55.0%
Argentina 744
22.6%
U.S.
436
13.2%
Brazil
378
11.5%
Chile
198
6.0%
Sources: ‘Summary profit & loss ledgers’, Dec. 1955, Dec. 1960, and Dec. 1963, LA,
F2/CA/Acc.2.
Table 5. Uses of dollar deposits at the London branch (£ million)
1960
1961
1962
1963
Dollar re-deposits
216
199
216
161
Dollar loans & overdrafts
0
18
34
46
Pound conversion: Loans
41
59
76
81
Pound conversion: Pool
17
29
57
95
Source: ‘London branch utilisation of U.S. dollar deposits’, 11 January 1965,
LA, F2/D/Rep.8.

19

Table 6. Dollar re-deposits by the London branch: Top ten countries and Bolsa branches(£ million)
1960
1961
Japan
49.5
Japan
55.5
U.K.
31.5
Eurobank
19.5
MNB
24.5
MNB
15.2
Eurobank
22.5
U.S.
14.5
U.S.
16.0
Belgium
1.3
France16.0
Germany
12.8
Italy
12.0
U.K.
10.2
Canada11.5
Canada10.0
Germany
5.4
Hungary
6.0
Belgium
5.2
Finland
5.2
BOLSA
branches
12.4
Bolsa branches
14.7
1962
1963
Italy
34.4
Italy
43.5
France
29.9
Japan
32.5
U.K.
29.2
Eurobank
24.5
Japan
27.0
U.K.
10.5
Eurobank
23.5
Finland
6.2
MNB
11.7
Germany
4.9
Finland
15.2
France
3.7
Germany
6.8
MNB
3.5
Norway4.2
U.S.
3.0
Canada4.0
Hungary
2.0
Bolsa branches
12.9
Bolsa branches
13.1
Notes:a
MNB is the acronym for the Moscow Narodny Bank of Soviet Union.
bEurobank represents the Banque Commerciale pour l’Europe of Soviet Union.
Source: ‘London branch re-deposits of U.S. dollars’, 11 January 1965, LA, F2/D/Rep.8.

20

Table 7. US$ foreign assets & liabilities of UK banks and Bolsa (1964) (%)
Liabilities
AssetsUK
UK banks Bolsa
banks
Bolsa
Austria61
01
Belgium22
43
Denmark0
1
3
0
France2369West Germany
2
3
4
3
Italy
2
4
12
16
Netherlands
33
41
Norway
1
1
2
1
Spain
1
1
1
0
Sweden2
1
3
0
Switzerland
24
15
3
0
Other Western Europe
102
2
Total Western Europe
46
35
44
36
U.S.
14
33
33
12
Canada14
17
2
6
Latin America
53313Middle East
10
1
2
0
Japan
0
1
10
22
Other
7
1
6
11
Total
100
100
100
100
Total amount (£ million) 3430
368
2926
257
Note:
The figures presented in the table are as of 30 June 1964 for banks in the U.K. and 13
November 1964 for Bolsa.
Source: ‘External liabilities and assets in U.S. dollars of Bolsa, London branch, as comparedwith of all U.K. banks’, Bank of England Archives, C48/156.

21

Table 8. London branch’s US$ deposits at other branches (£ thousand)BuenosNew York
BrazilParis
Aires
June 1960
8000
1300
Dec. 1960
8000
3800
2600
March 1961 8000
5500
2000
July 1961
8000
5000
9820
Oct. 1961
11000
5300
1800
Dec. 1961
11000
2800
9000
Feb. 1961
9000
1000
May 1961
9000
1650
500
Aug. 1961
9000
1900
500
Oct. 1961
9000
2400
1650
Dec. 1961
9000
2300
1650
March 1963 9000
6640
650
June 1963
9000
7380
Aug. 1963
9000
3640
Nov. 1963
9000
3300
Dec. 1963
9100
4050
Source: ‘London branch re-deposits of U.S. dollars’, 11 January 1965, LA, F2/D/Rep.8.
Table 9. Dollar loans and overdrafts given by the London branch(Nov. 1963) (US$ million)
Total amount
Latin America 24.32
Eastern Europe 7.55
West Germany 2.62
Other
15.22
Total amount
49.71
Source: ‘London branch re-deposits of U.S. dollars’, 11 Jan. 1965, LA, F2/D/Rep.8.
Table 10. Dollar re-deposits of the London branch (Dec. of each year) (£ thousand)
1960
1961
1962
1963
Argentina
00589
0Brazil
1357
1000
821
1446
U.S.
2143
3928
3214
3247
France928
321
00
Source: Tab. 8

22

Table 11. BOLSA’s inter-branch accounts by selected countries (£ thousand)
1960
1961
1962
1963
Argentina
10
140
800
1200
Brazil
-2800
-1100
70
-700
U.S.
-1600
-5100
-7100
-6500
France
-1000
-200
40
20000
London
18100
8300
35700
89700
Head office(inLondon)-13200-3200-28600-82500Source: Appendix
Table 12. Percentage of dollar re-deposits in total balance sheets
1960
1961
1962
1963
Brazil 84.8%
90.9%―
206.6%
U.S.
133.9% 77.0%
45.3%
49.9%
France 92.8%
160.5% ――Sources: Appendix and table 8
Table 13. Supply of funds by the London branch to other branches (£ thousand)
1960
1961
1962
1963
Dollar re-deposits (a)
4428
5284
4625
4693
Total supply of funds (b) 4900
5100
7100
7200
(a)/(b)90.4%
103.6% 65.1%
65.2%
Notes:a
Dollar re-deposits represent balances as of Dec. of each year.
b
Total supply of funds represents total supply of funds minus supply of funds to the head
office in London.
Sources: Appendix and table 8
Table 14. Percentage of trade settlement in dollar for Latin America and Europe%ofUS$
Argentina,
Uruguay,
Paraguay
7%
Brazil, Chile, Peru, Bolivia 41%
Other
96%
Total for Latin America
33%
Notes:aVenezuela is not included.
b‘Other’ includes Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala,Haiti, Honduras, Mexico, Nicaragua, Panama, and El Salvador.
Source: Economic Commission for Europe, ‘European trade with Latin America’, p. 21.

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Table 15. Shares in Brazil’s foreign trade(%)
U.S.
Britain
Exports Imports Exports Imports
1951
50.9
45.4
10.2
9.2
1952
54.4
45.3
2.8
9.3
1953
49.9
30.6
4.7
4.1
1954
37.9
36.1
4.8
1.1
1955
43.2
26.3
4.3
1.5
1956
50.6
32.1
3.6
3.8
1957
48.6
40.3
4.9
3.7
1958
45.9
39.6
4.6
3.6
Note: Exports from Brazil and imports to Brazil
Source: Naciones Unidas, Boletín económico de América Latina, Cuadro 30, pp. 48–53, andCuadro 31, pp. 54–61.

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