United Nations Monetary and Financial Conference Ruby Jacob

Important facts:
Important facts Who ??? 730 delegates from 44 Allied nations Where ??? At the Mount Washington Hotel, situated in Bretton Woods, New Hampshire Why ??? To regulate the international monetary and financial order after the conclusion of World War II. When ??? 1 July to 22 July 1944 Achievements: Agreements were signed to set up 1. The International Bank for Reconstruction and Development (IBRD), 2. The General Agreement on Tariffs and Trade (GATT), 3. The International Monetary Fund (IMF). The Bretton Woods system of exchange rate management was set up . Mount Washington Hotel

Purposes and goals :

Purposes and goals The summary of agreements: "The nations should consult and agree on international monetary changes which affect each other. They should outlaw practices which are agreed to be harmful to world prosperity, and they should assist each other to overcome short-term exchange difficulties."

The main terms of this agreement :

The main terms of this agreement Formation of the IMF and the IBRD (presently part of the World Bank). Adjustably pegged foreign exchange market rate system: The exchange rates were fixed, with the provision of changing them if necessary. Currencies were required to be convertible for trade related and other current account transactions. The governments, however, had the power to regulate ostentatious capital flows. As it was possible that exchange rates thus established might not be favorable to a country's balance of payments position, the governments had the power to revise them by up to 10%. All member countries were required to subscribe to the IMF's capital.

Encouraging open markets :

Encouraging open markets The establishment of the IMF and the World Bank marked the end of economic nationalism. Joint management of the Western political-economic order.

Failed proposals :
Failed proposals International Trade Organization The ITO charter was agreed on at the U.N. Conference on Trade and Employment (held in Havana, Cuba, in March 1948), but was not ratified by the U.S. Senate. As a result, the ITO never came into existence. International Clearing Union John Maynard Keynes proposed the ICU as a way to regulate the balance of trade. The ICU would effectively be a bank with its own currency (the "bancor"), exchangeable with national currencies at a fixed rate. Nations would be the unit for accounting between nations, so their trade deficits or surpluses could be measured by it.

John Maynard Keynes (right) represented the UK at the conference, and Harry Dexter White represented the US.:
John Maynard Keynes (right) represented the UK at the conference, and Harry Dexter White represented the US.

The Bretton Woods system :

The Bretton Woods system Chief features Obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed valueplus or minus one percentin terms of gold. The ability of the IMF to bridge temporary imbalances of payments. Its collapse The United States on August 15, 1971 unilaterally terminated convertibility of the dollar to gold. This action created the situation whereby the United States dollar became the sole backing of currencies and a reserve currency for the member states. In the face of increasing financial strain, the system collapsed in 1971.