International Finance

             As early as 1941 plans were being prepared in the UK and the USA for the post-war economy that were heavily influenced by the experience of the 1930s which had witnessed the collapse of the gold standard, the Great Depression, volatile exchange rates, trade-protection and competitive devaluations. In 1944 the United Nations Monetary and Financial Conference took place in Bretton Woods, New Hampshire, USA, where forty-five countries attended in order to restructure international finance and currency relationships and sought to build a framework for economic cooperation that would avoid the disastrous economic policies that led to the previous conditions.
             The participants of this conference created the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development which was later divided into the World Bank and the Bank for International Settlements. The plans for the system of Bretton Woods were developed by two all time important economists, Harry Dexter White, then minister of state of the U. S. treasury and John Maynard Keynes, a British economist. Throughout the years, the IMF has been able to assist countries in need and as such, has been the focus of the international financial system.
             However, the financial crises of the past few years have exposed weaknesses in the international financial system. These weaknesses relate to the increasing size and importance of large cross border capital flows and the interdependence of global economies as a result of globalisation. It was found that once crisis struck in one country, the reaction of the interconnected financial markets was extreme and highly contagious causing disastrous effects in unrelated markets.
             Following the collapse of the Thai baht in 1997, the financial markets in other East Asian countries suffered similar and devastating consequences. Furthermore, the continued spill over effects of this crisis hit Russia, reached Latin America...

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International Finance. (1969, December 31). In MegaEssays.com. Retrieved 08:07, March 29, 2024, from https://www.megaessays.com/viewpaper/15817.html