A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1980 - 2002

© Roy Davies & Glyn Davies, 1996 & 1999.

Based on the book: A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5. (Page numbers in the 3rd edition published in 2002 may be slightly different).

c. 1960- The Population Explosion becomes a matter of increasing concern
The rapid increase in the world's population, especially in the Third World, hampers the attempts of the poorest nations to escape from their poverty and adds to inflationary pressures, which tend to be far worse in developing countries than industrial ones, as well as exacerbating environmental problems.

p 5-9,43,593-597

1965-1987 Rapid expansion of US banks abroad
From 13 US banks with a total of about 200 foreign branches the numbers increase to about 200 banks with around 800 branches. The growth is temporarily interrupted by the stock market crash of 1987.

p 525

1969-1983 Number of banking offices in India increases five-fold
The government's attempts to control rural moneylenders result in such a shortage of credit in many villages that agricultural output falls. The authorities react by stimulating the growth of cooperatives and the formation of bank branches in villages. The number of banking offices increases from 8,262 to 42,016.

p 624-625

1978-1980 2nd OPEC oil price shock
OPEC doubles the price of oil between 1978 and 1980. This leads to an increase in interest rates, pushes industrial countries into a deep recession, and is a contributing factor in the Third World debt crisis of the 1980s and 1990s.

p 633-634

1979-1990 Thatcherism in Britain
Margaret Thatcher greatly strengthens the commitment to monetarism. Manufacturing industry is badly affected but the financial sector is strengthened. The average rate of inflation is actually higher than during the Keynesian era from 1934-1976.

p 431-441

1980 - ? Third World debt crisis
During the 1970s many developing countries borrow large sums, many of the loans being at variable rates from commercial banks which are very eager to lend money after their coffers are swollen by money from OPEC countries following the oil price hike in 1974. When interest rates rise in the industrial world in an effort to curb inflation, the debts of many developing countries start to rise beyond their capacity to repay them.

p 21,629-636

1980 US Depository Institutions Deregulation and Monetary Control Act
Some banks have been seeking to evade restrictions by leaving the Federal Reserve System. Under this act all deposit-taking institutions are to be subject to the Federal Reserve System's reserve requirements in a planned, seven year programme.

p 532

1980 Poland is unable to meet its debt obligations
A few members of the Soviet bloc, like many Third World countries, are affected by the developing international debt crisis. Poland's creditors agree to a rescheduling of its debt obligations but western bankers rapidly withdraw funds from other eastern European countries.

p 633

1982 Mexican debt crisis
A crisis caused by massive flight of capital from Mexico to the USA is tackled by loans from the US government, the New York Federal Reserve Bank, the IMF and the Bank for International Settlements. However the Mexican crisis triggers off a flight of capital from other heavy Latin American borrowers such as Argentina, Brazil and Venezuela.

p 633-634

1982 US Garn-St Germain Act
The powers of the Savings and Loan Associations (thrifts) are widened and as a result the thrifts begin to diversify their assets.

p 533,540

1984-1990 Rapid expansion of foreign banks in the US
The value of foreign banks' assets in the US increases from $80 billion to $209 billion.

p 527

1984 US Federal Appeals Court legalizes nationwide ATM networks
It had been argued that automatic teller machines (ATMs) were branches and therefore subject to laws restricting branch banking but the Court rejects this argument.

p 542

1985 Savings and Loan Association crisis starts
A run on thrifts in Ohio and Maryland leads to the insolvency of their state-chartered deposit insurance agencies.

p 534

1985 EEC agrees to a Single European Act
The aim is to create, by the end of 1992, a unified economic area in which goods, services, people and capital would be able to move freely.

p 448

1986 Federal Savings and Loan Insurance Corporation declared insolvent
Large losses by thrifts in Texas and elsewhere lead to the FSLIC's insolvency.

p 534

1986 British building societies get new banking powers
The Building Society Act gives them greater freedom, allowing them to become public limited companies if they wish. For some this is a first step towards becoming fully fledged banks.

p 428-429

1986 London Stock Exchange's Big Bang
The Stock Exchange is opened up to new competitors and at the same time a new system of automated operations is introduced. These changes coincide with a great boom.

p 433

1987 US Competitive Equality Banking Act
An injection of $10.8 billion under the terms of this act keeps the Federal Savings and Loan Insurance Corporation in existence.

p 534

1987 The Great Crash
A fall on Wall Street reaches record levels on Friday 16 October. The same evening a hurricane sweeps over southern England and on Black Monday the London Stock Exchange suffers a similar fall to the one on Wall Street. Fearing that this crash, like the Wall Street Crash of 1929, might cause a world-wide slump the world's monetary authorities increase the money supply.

p 433-435

1987 Japanese trade surplus reaches $87 billion
This is higher in absolute terms than that previously recorded by any country. Much of Japan's export earnings during the 1980s are used in the form of direct and portfolio investments abroad particularly in the United States but also in Britain as a gateway to the European Union.

p 590-591

1988-1990 Housing boom in Britain
Tax relief on mortgage interest, too many institutions lending too much credit, and the diversion of personal savings into the housing market after the Great Crash, all contribute to the boom.

p 435-437

1988 15 countries have debts greater than their GNP
They range from Mozambique with debts of 399.7% of its GNP to Mali whose debts are 100.8% of its GNP.

p 632,634-635

1989 US Financial Institutions Reform, Recovery and Enforcement Act
Following a worrying increase in bank failures on top of the shambles of the savings and loan institutions, a new regulatory system is introduced.

p 536

1989 Delors Report on Economic and Monetary Union
The report contains a three-stage plan for the establishment of a single currency for the European Community which will be administered by a European System of Central Banks.

p 444,448-449,650

1989 Collapse of communism in Eastern Europe
Eastern Europe faces the challenge of restructuring command economies along market lines, similar in some respects to the problems successfully tackled by West Germany in its reforms of 1948. The scale of the investment needed raises fears in developing countries that the needs of the Third World will be ignored.

p 577,635,638

1990 Reunification of East and West Germany
The East German Ostmark is replaced by the Deutschemark in the ratio of 1 DM for 2 OM for business and large personal holdings, and 1:1 for small personal holdings.

p 452,577-578

1990 Britain joins the European Exchange Rate Mechanism (ERM)
The decision to join is motivated, at least in part, by Britain's repeated failure to meet its money supply targets.

p 440-441

1990 - c.1998 Negative equity as Britain's housing boom ends
The collapse of the boom results in the phenomenon of negative equity as house prices fall below mortgage obligations, especially in London and the South East. This does have the effect of helping to curb inflation.

p 437,672

1990 Japanese banks are the largest in the world; US has none in the top 20
In 1970 the 10 largest banks in the world were all American. Legal restrictions on nationwide banking in the US have prevented its top banks from growing sufficiently to match the biggest in other countries. The 4 biggest banks are all Japanese, as are 6 of the top 10, 9 of the top 20, and 109 of the top 1,000.

p 543,580

1990 Japanese banks have the largest foreign holdings in London
The assets of Japanese banks in London are higher than those of any foreign country and are around twice those of American banks.

p 581

1990 New Zealand introduces inflation targets
In pursuing an inflation target the monetary authorities are required to look at money in a very broad context. Over the next few years New Zealand's lead is followed by Canada (1991), UK (1992), Sweden, Finland, Spain and Mexico (1993).

p 651,671

1991 BCCI in world's biggest banking fraud
The Bank of England is forced to close the British branch of the Bank of Credit and Commerce International, thus exposing a banking fraud bigger than any in previous world history.

p 428,535,648

1991 The dissolution of the USSR
The former republics of the Soviet Union face similar challenges of reconstruction to those of those of the eastern European countries following the collapse of communism. Many subsequently introduce new currencies in the early years of independence.

p 577,638,658

1992 London maintains position as the world's leading foreign exchange centre
In April London' daily foreign exchange turnover is $300 billion compared with $192 billion for New York, and $128 billion for Tokyo. However the volume of financial transactions completely dwarfs turnover in world trade (in 1989 a report claimed the former was 25 times the latter) making exchange rates volatile.

p 451

1992 Maastricht Treaty on European Union signed
Among the provisions of the treaty is a target date of 1999 for the creation of a single currency.

p 454,649

1992 Britain leaves the European Exchange Rate Mechanism (ERM)
Massive international speculation, which hits different European currencies at various times, forces Britain to leave the ERM. Subsequently British interest rates are reduced substantially, helping to revive the economy. In retrospect Black Wednesday (16 September) is luckily seen to be "white".

p 441,453

1992 European single market comes into effect
By the end of 1992 the European Union officially has a single market with no barriers to capital, labour, goods or services. The inclusion of banking and financial services in the single market increases the pressure for a single currency.

p 448,454,545,649

1993 European Exchange Rate Mechanism reorganised because of speculation
After a number of currencies, especially the French franc, are the target of speculation like that which forced Britain's departure from the ERM the width of the official currency bands is increased greatly in order to preserve the system.

p 453,579,650

1993 Frankfurt is chosen as the site of the European Monetary Institute
This decision means that the future European Central Bank will also be sited there.

p 454,580

1993 Kyowa Credit and Anzen Credit rescued by Japanese Ministry of Finance
This is the first such rescue operation carried out by the Japanese central bank since 1927.

p 670

1994 Nippon Trust Bank saved by Mitsubishi Bank
Nippon Trust Bank is the latest victim of Japanese banking's mounting problem of bad debts but it is saved by being taken over by Mitsubishi Bank.

p 670

1994 Sumitomo Bank, the world's biggest, makes a loss
This is the first time in 50 years that any of the largest Japanese banks have declared a loss.

p 670

1995 Kobe earthquake
A devastating earthquake strikes Kobe in Japan on 17 January. Official funds are extended to the Bank of Kobe. The effect of the earthquake on the Nikkei 225 index of leading Japanese companies brings about the downfall of Barings Bank since Nick Leeson had risked enormous sums on the assumption that the index would not move materially from its normal range.

p 665,670

1995 Barings Bank fails
Barings, which nearly failed over 100 years previously in 1890, is brought down by the activities of the rogue trader, Nick Leeson, and taken over by Internationale Nederland Groupe.

p 664-665

1995 Daiwa Bank's New York branch loses $1.1 billion
The losses are caused by illegal deals by Toshihide Iguchi.

p 670

1995 By value over 90% of all transactions in the US are made electronically
The high costs of cheque and coin payments is a strong motivating factor in the development of electronic payment systems in the US and abroad.

p 661

1995 Mondex electronic cash card introduced
Trials of the Mondex smart card which is intended as a replacement for cash begin in Swindon in Britain.

p 662

1995 Mark Twain Bank adopts DigiCash
This is an anonymous form of digital money developed by the cryptographer David Chaum.

p 662

1997 David Bowie issues Bowie Bonds
The rock star issued bonds backed by the copyrights of his previously published songs - a remarkable example of securitization of intangible assets and a demonstration of the fungibility of money. See Who's Who in Bowie Bonds.

Bowie bonds are not mentioned in "A History of Money" but Linda Davies, the daughter of the author of that work, is the author of Something Wild, a thriller which is the first novel on the subject of Bowie bonds.


1999 European single currency is created
On 1st January 1999 the Euro becomes the currency of 11 of the member states of the European Union (Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland). Therefore Europe enters the 3rd millennium with a new currency.

p 454,545,650,658,662-663

2002 New Euro coins and notes are introduced by the European Union
These replace the national coinages and banknotes of the countries which adopt the new single European currency.

p 658-659

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Roy Davies - Last updated 25 May 2005.