scholarly journals Borio, Claudio u. a. (Hrsg.): Promoting Global Monetary and Financial Stability. The Bank for International Settlements after Bretton Woods, 1973–2020, 302 S., Cambridge UP, Cambridge 2020.

2021 ◽  
Author(s):  
Matthias Kemmerer
Keyword(s):  
Financial Stability ◽  
Bretton Woods ◽  
Bank For International Settlements

Central Banks

2018 ◽  
Author(s):  
Alex Cukierman
Keyword(s):  
Interest Rate ◽  
Exchange Rates ◽  
Gold Standard ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Financial System ◽  
Price Stability ◽  
Bretton Woods ◽  
Developed Economies

The first CBs were private institutions that were given a monopoly over the issuance of currency by government in return for help in financing the budget and adherence to the rules of the gold standard. Under this standard the price of gold in terms of currency was fixed and the CB could issue or retire domestic currency only in line with gold inflows or outflows. Due to the scarcity of gold this system assured price stability as long as it functioned. Wars and depressions led to the replacement of the gold standard by the more flexible gold exchange standard. Along with restrictions on international capital flows this standard became a major pillar of the post–WWII Bretton Woods system. Under this system the U.S. dollar (USD) was pegged to gold, and other countries’ exchange rates were pegged to the USD. In many developing economies CBs functioned as governmental development banks.Following the world inflation of the 1970s and the collapse of the Bretton Woods system in 1971, eradication of inflation gradually became the explicit number one priority of CBs. The hyperinflationary experiences of the first half of the 20th century, which were mainly caused by over-utilization of the printing press to finance budgetary expenditures, convinced policymakers in developed economies, following Germany’s lead, that the conduct of monetary policy should be delegated to instrument independent CBs, that governments should be prohibited from borrowing from them, and that the main goal of the CB should be price stability. During the late 1980s and the 1990s numerous CBs obtained instrument independence and started to operate on inflation targeting systems. Under this system the CB is expected to use interest rate policy to deliver a low inflation rate in the long run and to stabilize fluctuations in economic activity in the short and medium terms. In parallel the fixed exchange rates of the Bretton Woods system were replaced by flexible rates or dirty floats. The conjunction of more flexible rates and IT effectively moved the control over exchange rates from governments to CBs.The global financial crisis reminded policymakers that, of all public institutions, the CB has a comparative advantage in swiftly preventing the crisis from becoming a generalized panic that would seriously cripple the financial system. The crisis precipitated the financial stability motive into the forefront of CBs’ policy concerns and revived the explicit recognition of the lender of last resort function of the CB in the face of shocks to the financial system. Although the financial stability objective appeared in CBs’ charters, along with the price stability objective, also prior to the crisis, the crisis highlighted the critical importance of the supervisory and regulatory functions of CBs and other regulators. An important lesson from the crisis was that micro-prudential supervision and regulation should be supplemented with macro-prudential regulation and that the CB is the choice institution to perform this function. The crisis led CBs of major developed economies to reduce their policy rates to zero (and even to negative values in some cases) and to engage in large-scale asset purchases that bloat their balance sheets to this day. It also induced CBs of small open economies to supplement their interest rate policies with occasional foreign exchange interventions.

Lehren aus der Krise – Notwendige Änderungen der Finanzmarktregeln und zur Begrenzung systemischer Risiken

2009 ◽  
Vol 58 (3) ◽  
Author(s):  
Otmar Issing ◽  
Stephany Griffith-Jones ◽  
Stefano Pagliari ◽  
Claudia M. Buch ◽  
Katja Neugebauer
Keyword(s):  
Financial Crisis ◽  
Systemic Risk ◽  
Financial Stability ◽  
Market Failure ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Systemic Risks ◽  
State And Market ◽  
Bank For International Settlements ◽  
The International Monetary Fund

AbstractThe latest financial crisis has been caused by a mixture of state and market failure, argues Otmar Issing. To avoid future crises, more transparency is needed - not by gathering more information, but by gathering it systematically and thereby creating “intelligent transparency”. Furthermore, regulation has to be global, he states. The necessary institutions are in place: The International Monetary Fund, the Financial Stability Board and the Bank for International Settlements.Stephany Griffith-Jones and Stefano Pagliari point out, that containing “systemic risk” is one of the most important rationales for regulating financial markets. Our understanding of the sources of systemic risk has repeatedly been challenged by major episodes of financial instability. The crisis that started in the summer of 2007 has been no exception. They discuss how the latest global financial crisis urges analysts and regulators to rethink the origin of systemic risk beyond a narrow focus on the banking sector, beyond the “too big to fail problem”, and beyond a narrow micro-prudential focus. They focus on two regulatory principles: comprehensiveness and countercyclicality.Claudia Buch und Katja Neugebauer review the existing empirical evidence on whether the increase in cross-border activities has allowed banks to diversify risks and to what extent it has increased banks’ exposure to systemic risks.

Book Reviews

2014 ◽  
Vol 52 (1) ◽  
pp. 234-236
Keyword(s):  
World Bank ◽  
International Monetary Fund ◽  
Financial Stability ◽  
International Affairs ◽  
Financial History ◽  
Bretton Woods ◽  
The World Bank ◽  
Research Associate ◽  
The World ◽  
The International Monetary Fund

Richard N. Cooper of Harvard University reviews, “The Bretton Woods Transcripts” by Kurt Schuler and Andrew Rosenberg. The Econlit abstract of this book begins: “Presents the verbatim record of meetings of the Bretton Woods Conference, which established the International Monetary Fund and the World Bank. Transcripts focus on Commission I—the International Monetary Fund; the committees of Commission I; and Commissions II and III—the World Bank and other means of cooperation. Schuler is an economist in the Office of International Affairs at the U.S. Department of the Treasury and Senior Fellow in Financial History at the Center for Financial Stability. Rosenberg is a research associate at the Center for Financial Stability.”

Basle Committee on Banking Supervision: Basle Core Principles for Effective Banking Supervision

1998 ◽  
Vol 37 (2) ◽  
pp. 405-432 ◽  
Keyword(s):  
World Bank ◽  
International Monetary Fund ◽  
Financial Stability ◽  
Banking System ◽  
Banking Supervision ◽  
Financial Systems ◽  
The World Bank ◽  
The World ◽  
Bank For International Settlements ◽  
The International Monetary Fund

Weaknesses in the banking system of a country, whether developing or developed, can threaten financial stability both within that country and internationally. The need to improve the strength of financial systems hasattracted growing international concern. The Communique issued at the close of the Lyon G-7 Summit in June 1996 called for action in this domain. Several official bodies, including the Basle Committee on Banking Supervision, the Bank for International Settlements, the International Monetary Fund and the World Bank, have recently been examining ways to strengthen financial stability throughout the world.

scholarly journals Trends in the transformation of Bretton-Wood organizations in global space

2020 ◽  
Vol 2020 (8) ◽  
pp. 72-85
Author(s):  
Viktoriia KOLOSOVA ◽  
Keyword(s):  
World Bank ◽  
Financial Stability ◽  
Social Situation ◽  
The United States ◽  
Global Scale ◽  
Bretton Woods ◽  
The World Bank ◽  
The World ◽  
The Impact ◽  
The Imf

The article highlights the historical aspects and preconditions for the creation of the International Monetary Fund (the IMF) and the World Bank, which since 1944 have been the most influential international financial organizations and have played the role of the world's largest creditors. The essence of the transformations of their activity caused by the phenomena of the new economic reality is revealed. The solution to the problems of financial stability on a global scale in the postwar period by the United States and the newly created the IMF was to peg national currencies to the US dollar in the Fund's arbitration. The events related to the crisis of the Bretton Woods system of single fixed exchange rates and the irreversible disruptions in the world circulation of oil and its derivatives in the 1970s were important reasons for changing the principles of the world monetary and financial system towards the introduction of free exchange. At the same time, due to the intensification of domestic trade and investment, there were abrupt outpacing transformations of the economies of the south-eastern part of the Asian continent. Following the irreversible events involving the collapse of the socialist camp, support for reform programs in transition economies has been added to the IMF's targets. The activities of the World Bank under the impact of these total changes were also significantly renewed. Further, the IMF and the World Bank began to work more closely, integrating anti-crisis approaches and measures, while remaining a universally recognized instrument of stabilization in the global dimension. The activities of the Bretton Woods organizations are aimed at assisting the governments of developing countries in implementing market economic policies to protect the rights of all forms of ownership, modernize institutional structures, achieve financial balance, and improve the social situation of all segments of the population. It is concluded that in order to ensure sustainable development, the strategic renewal of the IMF and the World Bank provides for the expansion of quotas to support structural reform programs, improve the allocation of credit and financial resources, support opportunities to meet the needs of socio-economic systems, develop human capital and efforts for solving macroeconomic problems, etc. The directions of impact of these international financial institutions on solving actual problems concerning climate change, displays of corruption, overcoming inequality, resistance to threats of destabilization, struggle against a pandemic of a coronavirus disease of COVID-19 are defined.

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