This website uses cookies to ensure you have the best experience. Learn more

Black Wednesday Essay

792 words - 4 pages

From the section above, the European Exchange Rate Mechanism was created in 1979. But, up until October of 1990, Britain had refused to join the ERM. The two officials at the time John Major and Douglas Hurd convinced the government to sign up for the ERM, introducing the pound sterling to the ERM for the first time. By joining the ERM, the exchange rate between Britain's pound sterling and other member’s currency would not fluctuate more than 6%. The British Government followed economic and monetary policies to ensure that the fluctuation rate was maintained (Black Wednesday - The Prelude - Encyclopedia II).
Chancellor Geoffrey Howe and his successor Nigel Lawson were both advocates of a fixed exchange rate, both admiring the record of low inflation that Germany maintained and their management of the Bundesbank and the strength of the Deutsche Mark. The Britain treasury had a policy to shadow the Deutsche Mark.
There was huge controversy for the government officials involved in this potential adoption in the ERM with the debate between Margaret Thatcher's economic advisor, Alan Walters, and Lawson, had come to a presuppose like state, when Walters stated that the Exchange Rate Mechanism was "half baked" (Kaletsky). All this partisan bickering and endless debate led to Lawson resigning as chancellor to be replaced by John Major (Kaletsky).
The two government officials John Major and Douglas Hurd had been able to force Margaret Thatcher to sign up Britain to the ERM in October of 1990, effectively ensuring that the British Government would follow an economic and monetary policy that would prevent the exchange rate between the pound and other member currencies from fluctuating by more than 6%. The pound entered the mechanism at 2.95 Deutschmarks to the pound. Hence, if the exchange rate ever neared the bottom of its permitted range, 2.778 marks, the government would be obliged to intervene.
The year 1990 set the stage for a “perfect storm” of economic events to collide with each other to put pressure upon Britain’s economic system, High German interest rates, set by the Bundesbank to avoid inflationary effects related to German re-unification, caused significant stress across the whole of the ERM. Issues of national reputation and central bankers stubborn inability to realign exchange rates within the ERM...

Find Another Essay On Black wednesday

Black Friday: Good, Bad or just Ugly

805 words - 4 pages the Season)? Additionally, history has shown us that the word “Black” has long been associated with lose, devastation or just plain back luck. For example, there was the sell-off day right before the 1929 stock market crash, it was referred to as Black Monday. Another example, happened in 1954, it was referred to as Black Wednesday because it was a day of widespread air traffic chaos (Stout). In fact, the first use of the term Black Friday

The Extent to Which Voting by Ethnic Minorities Reflects the Voting Behaviour of the Whole Electorate

1009 words - 4 pages general election in which 70% of Asian voters and 86% of Black voters voted for labour. The difference in the two could be to do with the fact that Asian people in particular have been very successful in Britain with setting up businesses so in the 1997 elections the 25% of Asian voters that voted for conservative didn’t feel the effect of Black Wednesday as significantly as the rest of the electorate. In the opinion poll

Exchange rate policy and the central bank

1069 words - 5 pages British pound and that it might depreciate. The Article, 20 years of ‘Black Wednesday’: How George Soros toppled the Bank of England, describes how George Soros took the risk and how he traded the British pound for other currencies in Europe, he speculated and attacked. The bank of England had to do something but interest rates kept falling, there was nothing else they could do, and “The Bank then raised interest rates from 10 to 12 percent, in

Newfound Appreciation

896 words - 4 pages Newfound Appreciation Who is this man referring to himself as my tour guide, and just what is contemporary art? There I stood that Wednesday afternoon with my college Composition class in the entryway to the Daum Museum. To be honest, I was tired, hungry, and had no desire to look at contemporary art. We were there to observe what the guide of our tour described as "great pieces of artwork." Most of it, well at least to me, looked like

The Poisoned Apple: Stepmother and child relationship

1800 words - 7 pages ” [Wednesday 33]. Thus, she is never been given any specific description of how she should behave. This is her first time with children and she should be the natural with them. It is very opposite in this case. Also, researcher proves that stepmothers are wise to keep a distance from their stepchildren and try to be their friend, mentor but mother. Being stepmother is chaotic, confusing, and exhausting, especially in the beginning. In the start

Personal Narrative: Norm Violation

2412 words - 10 pages big chain, Sayreville and Hazlet were National Amusements, Marlboro and North Brunswick were Regal and New Brunswick was Sony. I went to Marlboro twice, once on a Wednesday Night and once on a Saturday Night. The first time I went on a Saturday Night and had a Black Male that was about 19, he was very arrogant and acted like he was a God, I then left and got a Manager, the manager was a White female at age 28, she told him that the customer is

Understanding Black Holes

2647 words - 11 pages Hawaii, an international team of astronomers have discovered strong evidence of an incredibly powerful black hole as massive as 40 million suns. The findings, presented to the American Astronomical Society in Tucson Wednesday and published today in the journal “Nature,” is considered the strongest evidence yet of the existence of black holes. It is difficult to prove the existence of black holes primarily because, by definition

Go Dragons, Win State

1230 words - 5 pages Go Dragons, Win State The championship is a 32-team, single-elimination tournament featuring 13 automatic qualifiers from 11 Division I affiliated conferences, two automatic independent qualifiers, and 17 at-large berths. The tournament bracket will be released at 5:00 p.m. (CST) on Wednesday, March 8. SCHEDULE: First-Round on Wednesday, March 14 and Thursday, March 15, with eight games: 9 a.m., 10:45 a.m., 12:30 p.m., 2:15 p.m., 4:30 p.m


642 words - 3 pages Happy Days The wind was blowing in my hair and I felt like I was flying; I can't believe that I was riding so perfectly. My dad was cheering in the back, his shouts fading as I rode down to what seemed to me as a limitless, endless pathway. It all begun on a frosty Wednesday morning; during the Christmas holidays, and this German piercing weather would have never lead me out of bed if it were not for today's event. At seven years old, however

i am country boy kids

1373 words - 5 pages + Community Sociology Camp 2 13 - 15 July 2012 (Friday - Sunday) 9am - 6pm 1. Community Sociology Program Training Session Introduction to Langkawi Project and Mission of Undergraduates Community Service Program Team building games Election Planning and organizing activity such as drama performance and closing ceremony Improve communication skills, Public Relation & Leadership Skills 3 26 & 27 September 2012 (Wednesday &amp

Chinatown as Film Noir

853 words - 3 pages venetian blinds] installed on Wednesday.? Venetian blinds are often seen in the genre, and the reference immediately makes the connection between this neo-noir and older films. Also, the first things the audience sees when the film begins are dark, black and white photographs. They take up the entire screen, so for the first minute or so of the film, the audience does not realize that they are, in fact, photographs that detectives are examining

Similar Essays

Black Wednesday Essay

1175 words - 5 pages Not everyone had a terrible experience on Black Wednesday. Some people had some insight and saw that something was happening and knew they should do something before it was too late. Some of these people were the managers of hedge funds. Hedge funds are funds managed by professional investors, similar to mutual funds with one of the main differences being the amount that needs to be invested. Mutual funds deal with relatively small amounts of

Black Wednesday Essay

1077 words - 5 pages In Britain, Black Wednesday refers to September 16, 1992, which is known as the day that a combination of monetary policy makers and speculators “broke the pound”. They didn't actually break it, but they forced the British government to pull it from the European Exchange Rate Mechanism (ERM), successfully removing itself from the collective “Eurozone” economy. The Mechanism The European Exchange Rate Mechanism was an act that was created by

The Hadron Collider Essay

1286 words - 5 pages . April 2011. Wednesday October 2013 . Websites: Works Cited • Choi, Charles. Mini Black Holes Easier To Make Than Thought. March 2013. Wednesday October 2013 . • Geek. How Does Large Hadron Collider Work. April 2011. Wednesday October 2013

The Easter Story & Cultural Tradition

1616 words - 6 pages of the Christian church throughout its history. These special commemorations include Ash Wednesday, the beginning of the forty days of preparation (Lent) for celebrating the death (Good Friday), burial, and resurrection (Easter) of Jesus Christ.Ash Wednesday begins a forty-day period during which Christians remember their sinfulness, repent, ask God's forgiveness, and recognize that God's forgiveness comes at an infinite price - the death of