Word: eurodollars
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Dates: during 1962-1962
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Today, an estimated three billion Eurodollars circulate through Europe's banking community. German, Dutch or Swiss banks that are rich in foreign reserves regularly deposit their dollars in London-which already seems destined to become the financial capital of the Common Market. London banks, in turn, relend the Eurodollars in Italy and Japan, where interest rates on foreign trade credits are particularly high. U.S. branch banks in Europe, eager to get into the profitable trade, have begun to court Eurodollar deposits by paying higher interest rates on them than is permissible...
Some European and U.S. bankers fear that the endless lending and relending of Eurodollar balances has already led to a dangerous pyramiding of credit. Fortnight ago, U.S. Under Secretary of the Treasury Robert Roosa urged Congress to try and lure the wandering dollars home by eliminating U.S. interest ceilings on deposits from foreign central banks...
...other bankers and economists argue that the brisk trade in Eurodollars has had at least two beneficial results: 1) it has helped meet the growing demand for trade credits among Western nations; 2) it has discouraged foreign banks from converting their dollar balances into U.S. gold, and thus has eased the drain on Fort Knox. The Eurodollar, most experts agree, will gradually disappear if U.S. interest rates rise to European levels, or the U.S. payments deficit ends...