In the same year, by contrast, the whole London Stock Exchange raised just $240m. His idea - conjuring a debt market from the pool of so-called “eurodollar” deposits that had accumulated offshore in the hands of European institutions - finally took wing in 1963.Ĭoncerned about a widening balance of payments deficit, the US government imposed a withholding tax designed to stem the flow of dollars abroad, and inadvertently breathed life into what became the eurobond market.īy 1970, from a standing start, issuance was running at $45bn annually, four-fifths of it arranged out of London. ‘It is hard to read Brexit as a positive for the City of London if you peer forward 20 years into the future,’ says Philip Augar © Charlie Bibby/FT An offshore financial playgroundīolton deserves to be remembered as one of the architects of the City’s postwar resurgence. But, otherwise, Cromer signalled his support. When he responded a fortnight later, the governor noted a few practical tax and legal difficulties. “But we would not wish to proceed more actively unless the ideas have the general blessing of the authorities.”
“Conversations so far have been kept within the very small group of representatives of Barings, Samuel Montagu, Warburgs and ourselves,” he wrote to Cromer of the other banks involved.
If capital could once more flow freely, Bolton thought, London, with its expertise and traditions, would be a massive beneficiary. Its cause, he had told London’s Overseas Bankers Club the previous year, was “the persistence of exchange controls, the restriction over the movements of people and the consequent granulation of Europe’s capital and human resources into isolated jealous particles”. Postwar reconstruction was hampered by a shortage of capital. Instead of eking out an increasingly moth-eaten living financing the dwindling proportion of global trade that was still denominated in sterling, Bolton felt the future lay in opening up London as a hub for loans in foreign currencies. Bolton’s idea of conjuring a debt market from the pool of so-called ‘eurodollar’ deposits finally took wing in 1963 © Howell Evans/BIPs/Getty
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