Bretton Woods Monetary Agreement

This useful collection of basic documents and essays marks the 75th anniversary of the Bretton Woods Agreement of July 20, 1944. The Bretton Woods system is mainly identified by the monetary agreement that established the International Monetary Fund (IMF) to help countries maintain fixed exchange rates. In fact, the IMF was part of a group of interdependent institutions, including the International Bank for Reconstruction and Development (IBRD), the precursor to the World Bank, and, three years later, the General Agreement on Tariffs and Trade, a precursor to the World Trade Organization, much later. In the 19th and early 20th centuries, gold played a key role in international financial transactions. The gold standard has been used to support currencies; The international value of the currency has been determined by its stable relationship with gold; Gold has been used to settle international accounts. The gold standard maintained fixed exchange rates, which were considered desirable, as they reduced the risk associated with trade with other countries. 5. When a member has reached an agreement with the Fund covered in point 3, the Fund uses the currencies of other members assigned to that member in accordance with point 2 (d) to pay the member`s currency, the other members who have entered into agreements with the Fund under 3, under 3. Each amount thus collected is cashed in the currency of the member to whom it has been allocated.

He believed that the priorities of the United States were correct and, although there were internal tensions within the Western Alliance, that abandoning open trade would be more costly, economically and politically, than it was worth: «Our role in global leadership in the political and military sense is the only reason for our current economic embarrassment, on the one hand, and on the other hand, and on the other , correcting economic embarrassment among current monetary systems. Create an unsustainable economic position for our allies. [Quote required] Despite its name, the World Bank has not been (and is) not the central bank of the world. At the time of the Bretton Woods agreement, the World Bank was created to lend to European countries devastated by the Second World War. The World Bank`s focus has changed in lending to economic development projects in emerging countries. These new forms of monetary interdependence have enabled huge flows of capital.