The Risk Controllers: Central Counterparty Clearing in Globalised Financial Markets

8

The Collapse of Bretton Woods and the Invention of Financial Futures

8.1 THE RETURN OF PEACETIME AND ECONOMIC GROWTH

The revival of futures markets and their clearing activities was a gradual process following the Second World War. Some US commodity markets closed during the war: for example, that for soya bean futures was shut from March 1943 until July 1947. On others, activity slowed to a trickle: potato futures, introduced on the New York Mercantile Exchange (Nymex) in the week before Pearl Harbor, traded only 80 contracts in 1945. Some markets were affected by war-time technical advances. Egg futures, a founding contract of the Chicago Mercantile Exchange when launched as the Chicago Butter and Egg Board in 1898, declined in importance after temperature control equipment in chicken houses enabled hens to lay eggs all year round instead of just in spring.¹

By 1948 markets were recovering in the US and being reintroduced into parts of continental Europe. But progress was patchy and limited by controls on capital movements. In Britain, the government only began to relax its grip on commodity markets in 1951, whereas some food rationing continued for years after that. When, in November 1954, Le Havre's coffee futures market reopened in temporary accommodation amid ongoing reconstruction of the city, its focus and that of its new clearing house – the Caisse de Compensation des Affaires en Marchandises au Havre – were much diminished compared with pre-war days. The market was ...