The seismic shift in global finance

A Chinese bank employee counts US dollar bills in China’s eastern Jiangsu province. The US dollar accounted for 88 per cent in paired foreign exchange currency trading in 2019 and 59 per cent of official foreign exchange holdings. afp

August 15 marks the 50th anniversary of US President Nixon delinking the US dollar from gold. Instead of a crisis, the ensuing half century marked the pre-eminence of the US financial system to global dominance.

In 2017, US Treasury Secretary Mnuchin commissioned four major studies on the US financial system that reviewed its efficiency, resilience, innovation and regulation. These surveys highlighted the US dominance in all four areas of banking, capital markets, asset management and financial technology. To quote: “The US banking system is the strongest in the world” . . . “The US capital markets are the largest, deepest, and most vibrant in the world . . . [that] include the $29…

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