Forex Forever: The City of London and the Foreign Exchange Market Since 1850

The world’s largest market is that for foreign exchange with a turnover running into trillions per day. The mystery is why this market is dominated by trading in London when the US dollar is the main currency in use. What role is played by this market? To many it is a speculator’s paradise, exposed to manipulation and contributing to currency volatility. For others it plays a central role in in the operation of the global banking system and a mechanism for maintaining currency stability.

In Forex Forever, Ranald C. Michie seeks to provide answers to these and other questions by examining how the foreign exchange market has developed in the City of London over the past 150 years and uncovers its secret existence in London before the First World War.

Michie explores how the City of London became the centre of the global foreign exchange market before 1914 through the international banking network, trading on the floor of the Stock Exchange, and the communications revolution that began with the telegraph. He investigates how that position was sufficient to make London the centre of a new foreign exchange market that emerged between the wars, survived the era of fixed exchange rates after the Second World War, and then flourished from 1970 onwards. This in-depth study helps to explain how and why the global monetary system has functioned since the middle of the nineteenth century.

Ranald C. Michie, Emeritus Professor, University of Durham

Ranald C. Michie is one of the world’s leading financial historians. He has written extensively on stock exchanges, securities markets, banking, and financial centres over many years, and is the author of several books including Banks, Exchanges, and Regulators (OUP 2020) and British Banking (OUP 2016). He taught at Durham University for 40 years and since 2014 has been attached to Newcastle University Business School. He has also had fellowships in New York and Toronto.