Bretton Woods international monetary system Essay

Bretton Woods international monetary system - Essay Example This paper outlines the main features of the Bretton Woods international monetary system, that had effectively replaced the gold standard system. The conference at Bretton Woods was held in the year 1944. The delegates present during the conference were from 44 countries. The conference led to the creation of a new monetary system commonly referred to as the Bretton Woods system. The new system was supposed to be more effective in governing the financial and economic relations among the greatest economies in the world. Judging by the economic disasters that were experienced in the 1930s a new monetary system was considered to be a necessity. Due to the failure of the gold standard during the World War II there was a breakdown in international economic cooperation with each and every country devolving their economic policies. This is believed to have further fuelled the growth of the great depression. As a result of the Bretton Woods system each member country was expected to adopt a monetary policy that ensured that the exchange rates of their currency remain at a certain value. In such fixed rates, there was evidently an increase in the ease of undertaking international commercial transactions. In order to see to it that the Bretton Woods system was successful the delegates decided that they would establish two financial institutions. One of the two institutions was the International Monetary Fund . The other institution that was brought into existence was the International Bank for Reconstruction and Development