ABSTRACT
A whirlwind of change swept through the London foreign exchange market in the decade or so that followed Britain’s adoption of a floating exchange rate in June 1972. Within nine months of sterling’s departure from its IMF parity, the creaking Bretton Woods system of fixed exchange rates finally collapsed and was replaced by a generalised regime of floating exchange rates. Floating exchange rates were introduced at a time of great economic instability and uncertainty, and this gave rise to bouts of exchange rate volatility that were every bit as intense as those that had been experienced during the 1930s, or the last time when floating had been the norm.
