The Bretton

Woods
System
Chapter III
Background for the
Establishment of
Bretton Woods System
Fear of the recurrence
of lack of cooperation
among nation-states
Political instability
Economic turmoil

Reduction of trade and

free flow of money
among nation
 5 KEY ELEMENTS
Expression of currency in terms of gold or gold
value to establish a par value

The official monetary authority in each country

would agree to exchange its own currency for
those country at the established exchange rates,
plus or minus a one percent margin

The establishment of an overseer for these

exchange rates; thus International Monetary Fund
was founded
Eliminating restrictions on the currencies of
member of states in the international trade

U.S. dollar became the global currency