If you measure you wealth in GBP, and your net assets have not gone up by 70% in the last decade, then you’re poorer than you were 10 years ago
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CPI is designed to miss-lead you
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Discussion
Hmm, the amount of US debt owned by the UK government itself, primarily through its foreign exchange reserves managed by the Bank of England.
The Figure: As of the most recent US Treasury data (May 2024), the United Kingdom held $740.7 billion in U.S. Treasury securities.
Global Rank: This makes the UK the 3rd largest foreign holder of US debt, behind Japan ($1.18 trillion) and China ($767 billion).
Context: This $740.7 billion represents the UK's official holdings. It's a significant part of the UK's national foreign exchange reserves, which are held for economic stability, to influence the currency, and as a safe, liquid asset.
The figure above is just the tip of the iceberg. A vast amount of US debt is held by private entities based in the UK, particularly in the City of London, which is one of the world's largest financial centers.
Estimating True UK Wealth in US Debt:
A reasonable estimate is that the total UK wealth (both official and private) in US Treasuries and other US debt vehicles is likely between $1.2 trillion and $1.8 trillion.
This estimate includes:
The official $740.7 billion in Treasuries.
A large portion of the "beneficially UK-owned" debt within that $2.2 trillion custodial holding.
Additional holdings in other US debt vehicles like agency debt (from Fannie Mae, Freddie Mac) and US corporate bonds.
So, as a percentage of total UK wealth:
Official Holdings ($740bn): Represents about 5.4% of the UK's total net wealth.
Estimated Total Holdings (~$1.5tn): Represents roughly 11% of the UK's total net wealth.
Interesting data!
Not to mention the fact the Eurodollar market was built and designed from the UK
Of which huge volumes of non-USD will be traded and held
I'd like to hear you more about this topic. Very curious, always happy to learn. I started looking at measuring wealth of countries in different ways... GDP is a terrible metric,.. and OMx what did I find ... Exciting to publish my paper, but still not ready
Here’s a start
Grok
High-Level Summary
The Eurodollar market is a vast, unregulated global market for U.S. dollar-denominated deposits held outside the United States, primarily in foreign banks or overseas branches of U.S. banks. It operates as a key pillar of international finance, enabling efficient cross-border lending and borrowing in dollars without the constraints of U.S. domestic regulations. This market has evolved into one of the largest and most liquid segments of the global financial system, often described as a form of “shadow banking” due to its opacity and scale.
Why It Started and Historical Context
The Eurodollar market emerged in the post-World War II era amid geopolitical tensions and regulatory pressures. Its origins trace back to the early 1950s during the Cold War, when the Soviet Union sought to park its dollar earnings from oil and commodity sales in London banks (specifically the City National Bank and Credit Suisse) to shield them from potential U.S. government seizure or freezing under anti-communist policies. This created the first “Eurodollars”—dollars held in Europe, outside U.S. jurisdiction.
The market truly exploded in the late 1950s and 1960s, fueled by two main drivers:
• Regulatory arbitrage in the U.S.: Under the Bretton Woods system (1944–1971), U.S. Regulation Q capped interest rates on domestic bank deposits to control inflation, making offshore Eurodollar deposits more attractive as they could offer higher yields without these limits.
• Currency convertibility: The 1958 restoration of convertibility for major European currencies (e.g., British pound, French franc) spurred international trade and capital flows, with dollars as the dominant reserve currency.
Growth was explosive: From an estimated $75 billion (in 2020 dollars) in 1964, the market ballooned over 252% to $264 billion by 1969. By the 1970s, oil shocks and petrodollar recycling (OPEC nations depositing dollar revenues abroad) further accelerated expansion. The end of Bretton Woods in 1971 and the shift to floating exchange rates amplified its role, as it became a flexible tool for hedging currency risks. Today, it underpins much of global dollar liquidity, with innovations like Eurodollar futures (launched in 1981) adding derivatives layers.
Major Players
The Eurodollar market is dominated by international banks rather than any single entity, with activity concentrated in global financial hubs:
• European banks: London remains the epicenter, with institutions like HSBC, Barclays, and Deutsche Bank leading in deposit-taking and lending.
• U.S. bank branches: Overseas arms of JPMorgan Chase, Citibank, and Bank of America handle significant volumes.
• Asian and emerging market players: Banks in Singapore, Hong Kong, and Tokyo (e.g., Standard Chartered, DBS) have grown prominent, especially for trade finance in Asia.
• Corporates and sovereigns: Multinational corporations (e.g., European and Asian firms) and oil-exporting nations use it for short-term funding, while hedge funds and asset managers participate via derivatives.
No central clearinghouse exists, so it’s a decentralized network of interbank transactions.
Market Size
Estimates vary due to its offshore, unregulated nature, but the market is enormous:
• Outstanding deposits exceed $10 trillion.
• Daily trading volume averages around $13 trillion, making it one of the world’s largest capital pools.
As of recent data (up to 2025), the total size hovers in the $13–14 trillion range, dwarfing many domestic bond markets.
Main Utility
The Eurodollar market’s primary value lies in providing global dollar liquidity free from U.S. Federal Reserve oversight—no reserve requirements, FDIC insurance, or capital controls apply, allowing for lower costs and higher flexibility. Key uses include:
• Short-term funding: Banks and corporations borrow/lend dollars for trade finance, working capital, and hedging interest rate risks via instruments like Eurodollar time deposits (typically 1–6 months) and futures contracts.
• International trade and investment: It facilitates dollar-denominated transactions worldwide, especially in regions with limited local currency depth.
• Arbitrage and risk management: Higher yields and evasion of domestic regs make it a go-to for global banks to optimize funding; it’s crucial for LIBOR/EURIBOR benchmarks (transitioning to SOFR post-2023).
In essence, it keeps the dollar as the world’s reserve currency flowing seamlessly across borders, but its opacity has raised concerns about systemic risks during crises (e.g., 2008 financial meltdown).