Watergate repercussionsThe immediate pressures on the financial markets unleashed by the Watergate revelations were still building up at the end of last month – having pushed the dollar to new lows and gold to $120 an ounce.
But there were few pointers to its longer-term repercussions. It would certainly be in keeping with Mr Nixon’s character if he were to react aggressively (assuming he remains President). Domestic troubles have always tended to make heads of governments look overseas for diversions, and there is plenty of scope for the President to be tough abroad this year, particularly in the trade and monetary talks. The real trouble is that the Congressional and other inquiries into the bugging of the Democratic headquarters in June last year, the subsequent ‘cover-up’ and the many other under-cover scandals, such as the Vesco affair will drag on for many months. The President will hardly be able to give international negotiations a firm guiding hand from the top.
The Swift revolution
A few weeks ago a new society was quietly formed in Brussels by 239 of the world’s largest banks which will most certainly revolutionise the pattern of international money transmission over the next few years. Its purpose is to provide a private international telecommunications network which will enable banks to transmit between themselves international payments, statements and messages. Officially known as the Society for Worldwide Interbank Financial Telecommunications (Swift), it is the first tangible result of a two-year study of the legal, technical and economic problems involved.
Highlights of the year
There has been considerable reshuffling of positions in the ‘Top 300’ banks during 1972. Some new banks are in the listing for the first time and some banks have dropped out.
In the top 10, Manufacturers Hanover has slipped (to No 15) and has been replaced by Crédit Lyonnais which comes in at No 9. The first four remain in the same ranking as last year but very noticeable is the performance of Chase Manhattan at No 3. Last year Chase showed a net decrease in assets. This year it has shown an increase of 25.3%, the largest increase of any of the 10 leading US banks. At the other end of the table, Habib Bank has gone due to the massive devaluation of the rupee vis-a-vis the dollar. The Trust Bank of Africa, last year at 300, has dropped out, leaving Volkas the only remaining South African bank in the listing.
