1. 13/10/2015 1 The International Monetary System II Dr. Antony Mueller

2. 13/10/2015 2 1984 Fragilities emerge in the international financial system Bailout of banks in US US Savings and Loan (S&Ls) crisis Rising US budget deficits Rising US current account deficits

3. 13/10/2015 3 1985 Deterioration of International debt crisis Dollar continues to rise September 22: The “Plaza Accord” agreement to bring down the US dollar

4. 13/10/2015 4 1986 Oil prices begin decline US and Japan agree on plan to stabilize Yen-Dollar exchange rate

5. 13/10/2015 5 1987 1987, January: intervention to hold the dollar decline February 20: Brazil declares moratorium on its external debt February 22: “Louvre Accord” aimed at strengthening the dollar Extreme dollar weakness Bond crash in US October 19: Global stock market crash

6. 13/10/2015 6 1989 March: Brady Plan to alleviate developing countries external debt situation November 9: Fall of Berlin Wall December 17: Japanese central banks initiates restrictive monetary policy in order to tame the boom in the stock market and in real estate

7. 13/10/2015 7 1990 US Banking crisis July 1: German economic and monetary union August 2: Start of first Gulf war Run on banks in US 35 large US banks close to bankruptcy October 3: Official reunification of Germany October 6: UK joins the European exchange rate mechanisms November: US Citibank implements its “survival strategy”

8. 13/10/2015 8 1991 Dollar reaches new low of 1.45 DM February 27: end of first gulf war Global rise of stock market US economy enters long upswing December 16: US interest rates reach new lows since the 1960s

9. 13/10/2015 9 1992 Banking crisis in Japan Nikkei falls to 14,309 points (after almost 40 000 at the top) September: George Soros blows the British Pound out of the ERM