FINANCIAL GLOBALISATION/59they control went in the same direction. They roundly denounced the
head of the Malaysian government for criticising big investors on the
financial markets. Simultaneously, they called for neo-liberal
measures to buoy up these very same big financial players.
THE DIFFERENT STAGES OF FINANCIAL DEREGULATION
Right up until the end of the 19 70s, financial and monetary systems
were strictly limited on the national level. Nevertheless, the birth of
the eurodollar (see glossary) in the 1960s was a major event,
especially given the key role of the eurodollar as a factor in the Third
World debt crisis (Adda, 1996; Chesnais, 1996; Norel and Saint-
Alary, 1988). (See Chapter 7 on this question.)
The second key event in financial internationalisation began in
August 1971, when US President Nixon put an end to the Bretton
Woods system by discontinuing the dollar's convertibility into gold.
This led to the emergence of floating exchange rates, which signifi
cantly broke down the barriers between exchange markets (de
Brunhoff, 1996, in Chesnais).
From 1979 onwards, governments in the leading industrialised
countries effected measures that progressively phased out controls on
capital flows abroad. In other words, they liberalised - or opened up
to the outside - national financial systems.
This was done in three stages:
- full opening up of exchange markets;
- opening up of bond markets;
- opening up of stock markets (1986).
In the 19 8 Os, all forms of administrative control over interest rates,
credit and capital flows were progressively eliminated. This was the
course chosen by the main leaders of the industrialised world, leading
to an orderly retreat of governments faced with the powerful
unfolding dynamic of financial integration. One by one, governments
threw in the towel when confronted with the huge new sums of
capital flooding across borders; they resigned themselves to making
the best of this new reality that they had helped create. They engaged
in fierce competition to attract capital in their direction; to this end,
they abandoned most taxes on capital gains.