The Bretton Woods agreement has become a dollar-gold standard. Almost inevitably, the three major problems of the gold market standard of the interwar period have resurfaced: adjustment, confidence and liquidity. The G20 currently oversees the institutions that would lead a new agreement – the IMF and the World Bank. The responsibility to ensure that these institutions remain at the heart of global architecture rests, at least initially, with advanced economies, particularly the G20 members of the advanced economy. A new Bretton Woods agreement would symbolize global cooperation at a time when the global economy has suffered its biggest blow since the Great Depression. While caution is required in historical comparisons, the ability of nations to avoid economic collapse could stem the tide of populism and reduce the risk of conflict. Such an agreement would give new priorities to the IMF and the World Bank. Their main function disappeared when the Bretton Woods agreements ceased, and both institutions have been seeking a goal since 1971 (with very limited success). Global cooperation between governments will be needed to accelerate recovery and ensure that excessive competition is not an obstacle. Could a New Bretton Woods agreement contribute to the global economic and financial recovery, in a way that not only recognizes its finite business, but also includes criteria that lead to an orderly dissolution once their work has been done? The Bretton Woods rules, set out in the articles of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), provide for a fixed exchange rate system.
The rules also aimed to promote an open system by requiring members to convert their respective currencies into other currencies and to make free trade. The Bretton Woods countries have decided not to give the IMF the power of a global central bank. Instead, they agreed to contribute to a solid pool of national currencies and gold, which would be held by the IMF. Each member country of the Bretton Woods system then had the right to borrow as part of its dues, which it needed. The IMF was also responsible for implementing the Bretton Woods agreement. The third lesson is that reform negotiations need time, but they must be concluded before the crisis subsides. The United States and the United Kingdom teams launched the foundations of the Bretton Woods Conference in 1944 for two years. If they had not reached an agreement before the end of the war in 1945, it is very unlikely that the project could have been successful. They put forward a proposal to create a trade organization on a slower path, so that they could first focus on the creation of the IMF and the World Bank. Once the war was over, it was more difficult to reach an agreement and the World Trade Organization was not created until half a century later. Crises concentrate the mind and overcome daily concerns and rivalries. However, unlike the original Bretton Woods agreement, which transferred enormous power to the hands of a nation, the United States, the G20 members should reaffirm their fundamental role in achieving development and financial stability, which G20 members have struggled to recognize so far (at least publicly).
730 delegates from the 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, USA, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference.