Official Regulation of British Overseas Investment, 1914-1931

Atkin, John

doi:10.2307/2593833

Cited by 6 publications

(2 citation statements)

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“…To address this issue, the British government limited the number of overseas issues. Between 1921 and 1924, colonies and dominions were however allowed to issue bonds whereas foreign governments suffered from an embargo (Atkin, 1970). A few years later, the trustee status was changed.…”

Section: Implicit Guarantee Mechanismmentioning

confidence: 99%

Independence and the Effect of Empire

Degive¹,

Oosterlinck²

2021

Sovereign Debt Diplomacies

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‘Sovereign’ bonds issued by colonies are often supposed to benefit from an implicit imperial guarantee. This guarantee is usually presented as the main reason why yields on colonial bonds are exceptionally low. This paper investigates investors’ perception of this guarantee during the interwar period, a period during which the guarantor faced financial turmoil and some colonies began their journey towards independence. On the basis of an original database tracking the yields of six colonial bonds we show that, in general, market participants believed the guarantee would be honoured. This general observation needs, however, to be nuanced. In 1931 when Britain left the gold standard, investors felt the British guarantee was less valuable. Furthermore, when colonies were facing extreme financial distress, markets reassessed the likelihood the guarantee would be honoured. This was also the case when it became clear that India would become independent.

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Section: Implicit Guarantee Mechanismmentioning

confidence: 99%

Independence and the Effect of Empire

Degive¹,

Oosterlinck²

2021

Sovereign Debt Diplomacies

View full text Add to dashboard Cite

show abstract

“…However, during WWI government progressively restricted access to overseas (especially non-Empire) securities, to protect Britain's foreign exchange position. Treasury restrictions were relaxed from April 1919, but were replaced by Bank of England control over new overseas issues, which remained, intermittently, very restrictive during the 1920s (Atkin 1970;Attard 2004). The 1930s witnessed much more severe controls on new London foreign issues; in 1935 these accounted for less than 40 percent of new issues and their annual value was less than one-fifth of that in the 1920s (Kynaston 1991, p. 143).…”

Section: What Caused the Fall In Top Income Shares?mentioning

confidence: 99%