MOVING MONEY - REDESIGNING THE GLOBAL PAYMENTS SYSTEM 1969-99
February 2024 | Global Correspondent Banking 1870–2000 Working Paper Series, Vol. 1, No. 3 | University of Oxford.
Abstract
The cross-border payments system is the fundamental plumbing of globalisation, allowing day-to-day movement of money across borders. Although the 20th century evolution of the system has not yet attracted much attention from historians, it has features that make historical analysis particularly apt. This paper addresses two fundamental questions: how have cross-border payments systems responded to shocks, globalisation and innovation over the long term? how was the balance between private and public interests negotiated? It draws on archival records from banks and central banks in the USA, UK and Europe to take the long view of the evolution of the underlying plumbing of the international economic system, with a particular focus on the origins of two institutions that are still with us: SWIFT and CLS – and the tensions between public and private sector interests. The historical record emphasises the participation of the public sector in the design as well as the rescue of payments systems.
Keywords
Payments systems, correspondent banking, cross-border payments, Herstatt risk, SWIFT, CLS, international banking
