The Politics of International Credit: Private Finance and Foreign Policy in Germany and Japan

The Politics of International Credit: Private Finance and Foreign Policy in Germany and Japan

The Politics of International Credit: Private Finance and Foreign Policy in Germany and Japan

The Politics of International Credit: Private Finance and Foreign Policy in Germany and Japan

Excerpt

Throughout the 1970s and early 1980s, the role of commercial banks in international finance expanded greatly, reflecting the growth of international trade, the emergence of newly industrializing countries eager to acquire export markets and foreign capital, and the need to recycle petrodollars after the oil price increases of 1973-74 and 1979- 80. These developments presented banks with unprecedented opportunities and risks. By the early 1980s, the Eurodollar market, in which commercial banks are the principal intermediaries, had swelled to more than $2 billion. At the same time, commercial bank loans to developing countries outside of OPEC approached $250 billion.

As banks expand their international business dealings, they both influence and are influenced by the domestic and the foreign policies of the countries where they are headquartered. Governments differ in their attitudes toward leading commercial banks. They also differ in their capacity and willingness to influence the international allocation of credit by their banks. In this study J. Andrew Spindler focuses on the links between private finance and foreign policy. He deals mainly with the Federal Republic of Germany and Japan, though he is also concerned with the United States. One of his principal aims is to compare the links between commercial banking and foreign policy in Germany and Japan with those in the United States. He argues that the United States cannot and should not attempt to copy German and Japanese patterns, but rather that U.S. officials, public and private, can learn much from Germany and Japan about the relation between banking and foreign policy.

When he wrote this book, Spindler was a business fellow in the . . .

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