Word: bankes
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Dates: during 1970-1979
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What mountains labored to bring forth such a ridiculous molehill!" complained Bonn's respected daily Die Welt. "A piecemeal approach that cannot work," sniffed the foreign currency chief of France's largest private bank. Such was the curt reaction in money centers last week to a widely ballyhooed U.S.-West German agreement that will give Washington more ammunition, in the form of borrowed deutsche marks, to use in defending the battered dollar. But unfortunately, the greenback fell once again in all major currency markets...
...deal that was revealed early last week. West Germany will lend the U.S. an additional $2 billion worth of deutsche marks that Washington can use to buy up surplus dollars on the exchange markets. That doubles the Treasury's line of credit at the West German central bank in Frankfurt. In addition, the U.S. may sell $740 million worth of IMF Special Drawing Rights ("paper gold") to the Germans for deutsche marks, and it proposes to borrow as much as $5 billion of foreign currencies from the IMF. That $5 billion credit already existed. Hence the net new money...
...Tokyo, the dollar hit a new low of 231.40 Japanese yen. Alarmed by the trend, which makes Japanese exports more expensive, the Tokyo government forbade sale of short-term Japanese bonds to foreigners and cut the central bank interest rate to 3.5%, the lowest since 1946. Those measures failed to keep dollars from pouring into Japan, so the Bank of Japan bought up $500 million of greenbacks offered for sale. That did not prop the price, and at one point the dollar broke the 230-barrier on some exchanges...
...investments in the land of apartheid can be high, but so can the costs in bad publicity. Last week the spotlight fell on two companies that had reacted to the dilemma in widely contrasting ways. In New York, Citicorp, holding company for the U.S.'s second largest bank. Citibank, let out the word that it had stopped all lending to the South African government and government-owned companies. In New Haven. Conn., Olin Corp., the owner of the Winchester Group, which is one of the largest U.S. firearms makers, was indicted on a charge of conspiring to ship weapons...
Bizarre as the Olin case is, the Citibank no-loan decision probably is more significant. A Senate report identifies Citibank as one of eleven U.S. banks that have made most of the $2.2 billion in U.S. loans now outstanding to South Africa. Citibank did not trumpet its decision; it broke the news in a proxy statement to shareholders, quietly adding that it is continuing to lend "selectively, to constructive private sector activities that create jobs and which benefit all South Africans." It did not say what guidelines it would follow to make sure its loans achieved a multiracial purpose. Nonetheless...