ABSTRACT
Sterling was allowed to move fairly freely within the area but was to be severely controlled in its use between each member country and the rest of the world. It paid members to pool their reserves in London, for they could still use them freely; and the arrangements helped Britain since it provided a larger support fund for sterling and Britain could use sterling in meeting debts within the area itself. The sterling area continued in existence long after the war, though, as world trade expanded and trade financial barriers were gradually dismantled throughout the 1950s and 1960s, it became less and less cohesive. British trade accounted for a large part of world trade; in addition many other countries found it convenient to use sterling, and the facilities that went with it in the City of London, in their own trade with third countries. London-based banks attract deposits in non-sterling currencies and use them to finance projects.
