In July 1944, 730 delegates

from 44 Allied countries

arrived to the postcard-
pretty New Hampshire resort
village of Bretton Woods
although World War II was
not over yet. The aim of the
Bretton Woods Conference
was to erect a new
framework for the postcard
global economy--a stable,
cooperative international
monetary system which
would promote national
sovereignty and prevent
John Maynard Keynes - British
economist – Britain’s
Representative
His ideas have had a major impact
on modern economic and political
theory as well as on many
governments' fiscal policies.
He advocated interventionist( 干涉
的 ) government policy, by
which the government would use
fiscal and monetary measures to
mitigate (lessen) the adverse
effects of economic recessions,
depressions and booms.
 His ideas: provide financial
assistance to improve a
country’s balance of payments
position
• Proposed to establish a world
“reserve currency” administered
by a global central bank.
• Believed this would have created
a fairer and more stable world
economy by automatically
recycling trade surpluses to
financial trade deficits.
His solution did not fit the interests of the
United States, eager to take on the role of
the world’s economic powerhouse.

Instead:
The conference opted for a system based
on the free movement of goods with the
American dollar as the international
currency.
 the dominant currency of  The dollar was
international exchange
linked to gold and
the price of gold
was fixed at $35 an
ounce (28g). In
effect the U.S.
dollar became “as-
good-as-gold” and
in this one act
became the
28g $35 dominant currency
of international
exchange.
 Members were required to establish a parity
of their national currencies in terms of gold
(a "peg"), link the dollar to gold at the rate
of $35 per ounce of gold. and to maintain
exchange rates within plus or minus 1% of
parity (a "band") by intervening in their
foreign exchange markets (that is, buying
or selling foreign money).
G20
For decades, the dollar has been the world's
most widely used currency. Many
governments hold a large portion of their
reserves in dollars. Crude oil and many
commodities are priced in dollars.
Business deals around the world are done
in dollars. But the financial crisis has
highlighted how America's economic
problems — and by extension the dollar —
can wreak havoc on nations around the
world.
 The world financial crisis, largely a result of
excessive risk-taking and faulty risk
management practices in the financial
markets, has highlighted the immediate
need for comprehensive reforms to the
existing global economic and financial
structure.
 The sub-loan crisis in the United States led

to the collapse of the world economy and

has brought an immeasurable loss to all of
the world .  
Restructuring the anachronistic Bretton
Woods system needs these activities:
re-examining reserve currencies,
dealing with growing public debt and the
symbiotic relationship of the state with
finance capital,
regulating stock markets, hedge funds, and
banks to avoid future disasters, and
dealing with the World Trade Organization.

So it would take a long time.

 Zhou Xiaochuan, governor of
China's central bank, has
proposed creating as part of
reform in the international
monetary system.
 “Create a currency made up of a
basket of global currencies and
controlled by the International
Monetary Fund. Call for a global
currency to replace the dominant
dollar”
 U.S. Dollars are still strong.
13

The supplier of this idea is just related to some

2 developing countries , such as Brazil.

The recent main issue is the recession, not the

3 current monetary system of the world.

It is a reflection of China government policy

4 against the action of American large issuing
U.S.dollars .