The Decline of Sterling
Managing the Retreat of an International Currency, 1945–1992

This book challenges traditional explanations of the prolonged demise of sterling as an international currency after World War II.

Catherine R. Schenk (Author)

9781107612990, Cambridge University Press

Paperback / softback, published 18 July 2013

464 pages
22.9 x 15.2 x 2.3 cm, 0.61 kg

'Anyone concerned about how to resolve the global imbalances in the international economy today needs to read Catherine Schenk's detailed study of the political and economic difficulties that bedevilled Britain's decades-long effort to eliminate the 'sterling problem' left over from World War II. Her detailed analysis of the issues that confronted British policymakers and how they were resolved shows how hard it is to correct global imbalances once they exist, even with the best of intentions and international cooperation. For, even if the stakes diminish over time, as they did with British sterling, the stake holders and their interests keep changing as well.' Larry Neal, University of Illinois, Urbana-Champaign

The demise of sterling as an international currency was widely predicted after 1945, but the process took thirty years to complete. Why was this demise so prolonged? Traditional explanations emphasize British efforts to prolong sterling's role because it increased the capacity to borrow, enhanced prestige, or supported London as a centre for international finance. This book challenges this view by arguing that sterling's international role was prolonged by the weakness of the international monetary system and by collective global interest in its continuation. Using the archives of Britain's partners in Europe, the USA and the Commonwealth, Catherine Schenk shows how the UK was able to convince other governments that sterling's international role was critical for the stability of the international economy and thereby attract considerable support to manage its retreat. This revised view has important implications for current debates over the future of the US dollar as an international currency.

List of figures
List of tables
Acknowledgements
1. Introduction and outline of the book
Part I. Reconstructing the International Monetary System 1945–59: 2. The post-war international monetary system 1945–50
3. Return to convertibility 1950–9
Part II. Accelerating the Retreat: Sterling in the 1960s: 4. Sterling and European integration
5. The sterling devaluation 1967: relations with the USA and the IMF
6. Sterling and the City
7. Multilateral negotiations: sterling and the reform of the international monetary system
8. The sterling agreements of 1968
Part III. Sterling's Final Retreat 1970–92: 9. Sterling and the end of Bretton Woods
10. Years of crisis 1973–9
11. The aftermath 1980–92
12. Summary and conclusions
Index.

Subject Areas: Economic history [KCZ], 20th century history: c 1900 to c 2000 [HBLW], British & Irish history [HBJD1]