If You Ask Me: A Global Banker Reflects on Our Times

Wriston, Walter B.


Iran and the Money Markets


What do you think the repercussions will be in the international money market from the flip of people in Iran?

The market didn't even hiccup. The first thing to understand is the size of the global market. We estimate that the foreign exchange market is somewhere between $15 trillion and $30 trillion. The gross national product of the United States is about $2 trillion. So you're talking about a market that just boggles the mind.

I'll give you another number, this one on the Eurodollar market. We have a system in New York called Chips[12] , which is the mirror image of dollar trading in London. Every night when we close those books, we've cleared through $120 billion. That's not the foreign exchange total. That's just Eurodollars. The size of the market is so immense that the answer to your question is, nothing happened when Iran went down.

Now, Iran has a lot of credits outstanding, but when you say , what you mean is individual companies in Iran that have borrowed either on suppliers' credits or on banks' credits. Iran, however, has short-term assets of U.S. Treasury bills in this country that exceed their total debt. So, nobody is very excited, except some journalists who didn't look at the other side of the balance sheet.

In that whole Eastern arc, we've lost Eritreas, Afghanistan, the horn of Africa--Ethiopia. The early warning system down in Iran may cost a few minutes alert time on an ICBM. But to the world's financial markets, the change in Iran is minor.


[12] Clearing House International Payments System.

  • The document was created from a compilation of interviews and question and answer segments with Walter B. Wriston which was later compiled into "If You Ask Me: A Global Banker Reflects on Our Times" in 1980. The original speech is located in MS134.001.034.00018.
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 Title Page
If You Ask Me: A Global Banker Reflects on Our Times
I: Getting Down to Fundamentals
The Big Cop-out
You Can't Go Bail for Everyone
Risk Is What It's All About
II: Some Basic Ills of the Body Politic
Lincoln Wouldn't Have Made It
Unpredictable Is a Dangerous Country
The Pitfalls of Single-issue Politics
Expect To Get Zapped
The Perils of Legal Pollution
The Injustice of Our Tax System
Those Wonderful People Who Bring You Inflation
Stop the Presses
Silly Premises Lead to Nutty Conclusions
Easier Said Than Done
III: New York, New York
New York City Is Alive And Well
The Road Back
IV: Careers
Rx for Happiness
Good Forward Planning
Dull Job?
A Simple Matter of Survival
Making It at Citibank
What Fast Track?
No Hiding Place
V: Once Around the World Quickly
South Africa
China: A Matter of Timing
The Real Significance of Iran
Iran and the Money Markets
Fashions in Country-criticizing
VI: The Global Financial Scene
The Elusive Eurodollar
De Facto Payments Mechanism
Too Big To Move
The Foreign Exchange Game
They Can't Leave the System
Baskets of Money
Swiss Francs
The Value of a Dollar
Not a Loss Since 1897
A Rational View of LDC Loans
Free Trade Benefits Consumers
The Destructive Costs of Regulation
The Big Rip-off
A Real Entitlement
Can Regulations Prevent Bum Loans?
The Insidious Side of Controls
Competition in Regulation
VIII: The Shape of Things To Come
Not As Big As You Think
What Lobby?
Armageddon Is Late, as Usual
Some Simple Facts about Interest Rates
An Expensive Luxury
How Big Is Big?
What We Did Yesterday Won't Work Tomorrow
A Matter of Semantics
Unpredictable Is a Dangerous Country
Privacy: A Serious Problem
The Unseen Revolution
Things Are Going To Be Different
Take the Handcuffs off Everybody
The Gray Areas of Lending
No Mouse under the Rug
Thank God We Don't Have National Banking
Competition Keeps You Awake
Accounting for Loan Losses
Not a Utility
People Like It
Computer Frauds
Some Final Words on Responsibility
About the Author