London's financial monopoly was such, before the first world war, that Britain did not have to concern herself with the gold backing of her short term foreign debt. Bank rate policy was sufficient to prevent any substantial loss of gold. The 1914 war caused U. S. finance to intervene on the world financial market and the dollar became an international currency. New -York, though technically inferior, competed with London whose importance declined. The «deposit compelling power » of sterling weakened and the problem of the gold reserve arose. The 1931 crisis entailed the definition and establishment of the Sterling Area, whose cohesion rested on a set of financial and commercial agreements. London was no longer the world's banker but became the Sterling Area's banker. As a result of the second world war, Britain's short term external liabilities (the «sterling balances ») increased considerably, but the Sterling Area's cohesion was preserved. A large part of this short term foreign debt is not dangerous, since it consists of blocked streling and the colonies' balances. An analysis of the recent evolution of the sterling balances and the gold and dollar reserves shows that London's position is tending to improve and London's influence to extend once more beyond the Sterling Area.