Читать книгу Islamic Finance and the New Financial System - Alrifai Tariq - Страница 15

In the aftermath of World War II, world powers again looked for ways to prevent future conflicts and bring about peace, stability, and prosperity. There were three major developments during this period: the birth of the United Nations, establishment of the Marshall Plan, and the negotiation of the Bretton Woods Agreement.

The United Nations (UN) was born on October 24, 1945, as an intergovernmental organization established to promote international cooperation, replacing the League of Nations, which had been deemed ineffective.

In 1948, the United States launched the Marshall Plan. The initiative was aimed at helping Europe rebuild after the war in order to prevent the spread of Soviet communism. The plan was in operation for four years, beginning in April 1948. Other objectives of the plan included removing trade barriers, modernizing industry, and making Europe prosperous again.47

In 1944, delegates from the soon-to-be-created United Nations held a conference at a hotel in Bretton Woods, New Hampshire, called the United Nations Monetary and Financial Conference, which is now commonly referred to as the Bretton Woods Conference. With the effects of the Great Depression and two world wars still fresh in their minds, delegates devised a new system that would relieve them of the challenges of maintaining a gold standard while also reducing currency volatility and instability.

Delegates at Bretton Woods favored pegged exchange rates for their flexibility over the previous fixed exchange rates. This arrangement would come to be known as the Bretton Woods System. Under this system, countries would peg their exchange rates to the U.S. dollar and the U.S. dollar would be convertible to gold at $35 per ounce.48 Countries pegging their currencies to the U.S. dollar would allow their exchange rates to fluctuate within a 1 percent band of the agreed-upon exchange rate. To achieve this, central banks would buy or sell their currency against the dollar to maintain the peg.49

This effectively made the U.S. dollar, rather than gold, the world's reserve currency. The U.S. dollar would still be redeemable for gold; however, other countries would no longer be required to hold large gold reserves or ship gold back and forth to adjust any payment imbalances, since the dollar would now serve that purpose. A country wishing to receive gold would first need to convert its currency to U.S. dollars and then present them to the Fed for gold.

Another important development following the Bretton Woods Agreement was the creation of two new institutions: the International Monetary Fund (IMF) in 1947 and the International Bank for Reconstruction and Development (IBRD) in 1946, which later became the World Bank. The IMF was established to support the Bretton Woods monetary system with the mission of facilitating multilateral cooperation on international monetary issues, providing assistance to member states, and offering emergency lending to countries experiencing crises and help in restoring their balance of payments.50

Under the agreement, members were authorized and encouraged to employ capital controls as necessary to help manage payment imbalances and meet pegging targets, but were prohibited from relying on IMF financing to cover particularly short-term capital hemorrhages.

The IBRD was established to serve as a financial intermediary for channeling global capital toward long-term investment opportunities and postwar reconstruction projects.51 The creation of these two organizations was a crucial milestone in the evolution of the international financial architecture, and some economists consider it the most significant achievement of multilateral cooperation following World War II.