Northwest of Suez: The 1956 Crisis and the IMF

Egypt's nationalization of the Suez Canal in 1956 and the failed attempt by France, Israel, and the United Kingdom to retake it by force constituted a serious political crisis with significant economic consequences. For the United Kingdom, it engendered a financial crisis as well. That all four of the combatants sought and obtained IMF financial assistance was highly unusual for the time and had a profound effect on the development of the IMF. This case study illustrates the complexities in isolating the current account as the basis for determining a balance of payments "need" and shows that the speculative attack on sterlingóand the IMF's response to itówere remarkably similar to financial crises in the 1990s. Copyright 2002, International Monetary Fund