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

Wriston, Walter B.


De Facto Payments Mechanism


Total commercial bank lending to governments and others around the world is now $60 billion. Total official lending-- by the World Bank, Inter-American Development Bank, and the others--is $6 billion. For the first time in history, twenty to thirty commercial banks have become the de facto payments mechanism of the world. This is a responsibility we've never had before, with the lender of last resort a network of commercial banks in different countries. In this new role we have to practice first-level crisis management, which we did when Herstatt[13]  blew. Chase had $2 billion backed up, but the system did not go down.

Those twenty-five to thirty commercial banks include three or four Americans, two or three German, two or three English, the Banco de Brazil, two or three in Japan and others around the globe. The new system of financial intermediation is now in the commercial sector, and that makes the governments' central banks nervous. It also makes us nervous. There's a whole new management skill that's going to have to be developed in the next fifteen years on how to handle these problems.


[13] On June 26, 1974, Bankhaus I D Herstatt of Cologne abruptly closed its doors after suffering extensive losses in its foreign exchange dealings. Foreign banks which had delivered funds to Herstatt in one currency and were awaiting delivery in another were exposed to losses, in turn. Subsequent government regulations on foreign exchange dealings and interbank provisions for simultaneous transactions prevent a recurrence.

  • 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