to the sterling area. Hong Kong Hong Kong originally declined to join the sterling area, due to its position as a centre for open market activities, but it joined at the end of the Second World War. Member benefits At the end of the war in 1945 the sterling area remained the largest and most coherent currency bloc in the world, and it provided its members with freedom to settle payments in sterling anywhere within the area without exchange controls. Members enjoyed the benefits of stable exchange rates and permanent access to the financial resources of the City of London. Meanwhile, the British government was able to use the pooled reserves of the entire area's membership to back sterling at times when there was a US dollar shortage. Demise Towards the end of the 1950s with the decline of the British Empire, political opinion rapidly shifted towards the view that trade with Europe was more important to the future of the United Kingdom rather than the historical preferential trading with the Commonwealth nations, which resulted in its attempts to join the European Communities (E.C) (the Common Market) which was formed in 1957. The UK government devalued the pound sterling in November 1967 from £1 = $2.80 to £1 = $2.40. This was not welcomed in many parts of the sterling area, and, unlike in the 1949 devaluation, many sterling area countries did not devalue their currencies at the same time. This was the beginning of the end for the sterling area. The Basel agreements of 1968 were designed to minimise flight from sterling to the US dollar. On 22 June 1972 Britain imposed exchange controls between Britain and other members of the sterling area, with the exception of Ireland and the Crown Dependencies (the Isle of Man and the Channel Islands). At the same time, Britain floated the pound sterling. According to Chancellor of the Exchequer Anthony Barber, this was to halt a recent increase in capital outflow to other parts of the sterling area. Opponents of these changes argued that the real reason for them was Britain's impending entry to the EEC, and that France was concerned about Britain's close economic ties with the Commonwealth and the sterling area, even though France continued to have special economic relations with its less successful former colonies in the CFA and CFP franc zones. The attempts by the United Kingdom to join