The Breakdown of the Bretton Woods System and First Reform of the International Financial Architecture
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This chapter focuses first on the efforts that were made to support the Bretton Woods system and the factors that led to its breakdown. This discussion is followed by a review of the multilateral debates that led to the first reform of the IFA. At this stage of its evolution, the primary focus of the IFA continued to be on improvements in the international monetary system. However, the outcome of efforts to improve the system was profoundly influenced by the growing force of capital flows within the international financial system. The result of this reform effort was a more decentralized and fragmented structure of the IFA. The chapter also highlights the important changes that occurred in the activities of the IMF and World Bank, and the emergence of the G7 as a de facto steering committee for the IFA.
KeywordsExchange Rate Central Bank International Development Association International Monetary System Bretton Wood System
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