Nobody's child: the Bank of Greece in the interwar years

Neither history nor economic historians have been kind to Greece’s central bank in the interwar years. Born at the behest of the League of Nations to help the country secure a new international loan, the Bank of Greece was treated with a mixture of suspicion and hostility. The onset of the Great Depression pitted its statutory objective to defend the exchange rate against the incentive to reflate the domestic economy. Its policy response has generally been criticized as either ineffectual or detrimental: the Bank is accused of having pursued an unduly orthodox and restrictive policy, both during but also after the country’s exit from the gold exchange standard, some going as far as to argue that the 1932 devaluation failed to produce genuine recovery. Relying primarily on archival material, this paper combines qualitative and quantitative sources to revisit the Bank of Greece’s birth and operation during the Great Depression. In doing so, it hopes to put Greece on the map of international comparisons of the Great Depression and debates on the role of the League of Nations, the effectiveness of money doctoring and foreign policy interventions more generally. What is more, the paper seeks to revise several aspects of the conventional narrative surrounding the Bank’s role. First, it argues that monetary policy was neither as ineffective nor as restrictive as critics suggest; this was largely thanks to a continued trickle of foreign lending, but also to the Bank’s own decision to sterilize foreign exchange outflows, thus breaking the ‘rules of the game’. Second, it revisits Greece’s attempt to cling to gold after sterling’s devaluation, a decision routinely denounced as a critical policy mistake. Last but not least, it challenges the notion that Greece constitutes an exception to the rule that wants countries who shed their ‘golden fetters’ recovering faster.

Conquest by Money

This chapter discusses the financial dimension of French informal imperialism. Foreign loans played an important part in France's commercial boom after 1850, as they often served to pay, directly or indirectly, for other countries' imports of French commodities. Examining the rationale and practical arrangements of French foreign lending in detail can therefore shed further light on the articulation of the military, economic, and cultural foundations of French informal imperial power. After underlining the peculiar propensity of France to export its capital in the nineteenth century, the chapter shows how a strand of French political economy, from Talleyrand to Leroy-Beaulieu, overtly promoted loans to friendly foreign states as a way of exercising tutelage beyond national borders. The chapter then turns to several prominent instances of French foreign lending — Haiti in the 1820s, the Ottoman Empire after 1850, and Mexico in the 1860s — to examine the logistics of French imperial finance and highlight the persistent primacy of political control rather than profit as the ultima ratio of French capital exports.

DEVELOPMENT DIRECTIONS OF AZERBAIJAN'S FOREIGN TRADE REGULATION

Foreign economic relations include foreign trade, foreign lending and borrowing, attraction of foreign investment, participation in international production cooperation, implementation of joint research programs, etc. is a system of economic relations. The development of national economies of countries trying to build a market system in modern times is closely linked not only with domestic opportunities, but also with the effective use of foreign trade, which is the main form of international economic relations. In this regard, the article shows and analyzes the current state of the country's foreign trade relations.

The Effects of Sanctions on the Lending Policy and the Value of International Banks: the Case of Iran

After being in force for several years, sanctions against Iran were partly lifted on 16 January 2016, reopening business options for the financial industry. This paper investigates whether a breach of internationally imposed economic sanctions had a negative impact on the value of a bank that decided to implicitly or explicitly violate those sanctions. Using event study methodology, our analysis provides evidence that a breach of Iran-related sanctions by foreign banks caused considerable wealth reductions for their shareholders who finally bear the corresponding fining-costs. The results also show that bank shareholders do not perceive the lifting of sanctions as being good news, implying that they lost faith in their bank’s ability to establish a sufficient compliance and due diligence system for Iran-related transactions. Finally, the study shows that the announced fining for a breach of sanctions does not induce spillover effects to non-fined banks. Thus, the study provides important insights on reasons of the current shortage of foreign lending toward Iran.

The World’s Wallet?

China’s economic success has led to the accumulation of the world’s largest foreign exchange reserves. The chapter discusses the role played by Chinese sovereign wealth funds in reinvesting reserves abroad, as well as the growth of foreign lending by the Chinese banks and the expansion of export credit, with particular attention to the activities of the China Development Bank and the China Exim Bank. Chinese aid has been particularly controversial, with widely differing claims regarding the volume of aid that China gives. The chapter discusses the scale of aid and the key features of the way in which Chinese aid is organized. It identifies the main drivers of Chinese financial flows, distinguishing between the different types. It concludes with a discussion of the wider implications of the growth of Chinese finance for development finance and the access of countries which have been marginalized by traditional lenders.

Foreign Lending Dilemma and Poverty in Pakistan, India and Bhutan: A Panel Data Analysis

Purpose: In developing countries foreign lending becomes a problem now a day instead of spend this lending for the development purposes. Ultimately this problem causes poverty in these countries where usage of foreign lending is not in proper ways. The purpose of this study is to investigate the impact of IMF and World Bank lending on poverty in Pakistan, India and Bhutan. In this study corruption, GDP, unemployment, secondary enrolment, and external debt are used as independent variables and poverty headcount ratio as dependent variable. Study finds out the relationship of corruption, unemployment and external debts with poverty and showing the positive relationship while secondary enrolment and GDP showing negative relation with poverty. Moreover study finds out that lending of IMF and WORLD BANK mostly causes poverty in these developing countries instead of reducing poverty because of corrupt government's weak policies for the distribution of loans. It is examined that the countries with strong policies and non-corrupt government can take full advantage of these lending for poverty reduction. But it is noticed that the countries which are the members of IMF structural adjustment programs are facing more poverty problems as compare to those countries which are not involved in these programs or even have less numbers of lending. Those countries are much better than the countries involve in structural adjustment programs.

Macri faces conflicting pressures in Argentina

Significance Although styled as the more 'business-friendly' candidate, Macri will face numerous challenges in making rapid macroeconomic changes, despite the need to do so. Since 2003, when President Nestor Kirchner took office, government economic intervention has grown steadily, exacerbated by a widening fiscal deficit and an ever-smaller trade surplus. Impacts Macri may seek rapidly to replace widely questioned Central Bank President Alejandro Vanoli. An adjustment to restore fiscal balance and reduce inflation will have unpopular political connotations. Macri will seek an agreement with holdout creditors, potentially opening the way to foreign lending. Kirchnerist forces in Congress and the public sector will seek to block significant policy shifts.