To foster the growth of world trade and post-war financing of Europe, Bretton Woods planners created another institution, the International Bank for Reconstruction and Development (IBRD), one of the five agencies that make up the World Bank Group and is perhaps now the main agency [of the World Bank Group]. IbRD had an authorized capitalization of $10 billion and had to borrow from its own resources to finance private loans and issue securities to raise new funds to enable a rapid post-war recovery. The IRD should be a special UN agency responsible for providing loans for economic development. The security of money by the gold standard began to become a serious problem in the late 1960s. In 1971, the problem was so serious that U.S. President Richard Nixon announced that the possibility of converting the dollar to gold was “temporarily” suspended. The stage was inevitably the last straw for the system and the agreement that sketched it. As chief international economist at the U.S. Treasury, Harry Dexter White designed the U.S. Cash Access Project in 1942/44, which rivaled Keynes`s plan for the British Treasury. Overall, White`s system tended to favour incentives to create price stability in the world`s economies, while Keynes wanted a system that promoted economic growth.

The “collective agreement was a huge international undertaking,” which took two years before the conference to prepare for it. It consisted of numerous bilateral and multilateral meetings to find a common basis for determining the policies that would be behind the Bretton Woods system. The agreement did not promote the discipline of the Federal Reserve or the U.S. government. The U.S. Federal Reserve expressed concern about a rise in the domestic unemployment rate due to the depreciation of the dollar. To undermine the efforts of the Smithsonian Agreement, the Federal Reserve lowered interest rates in order to pursue a pre-domestic policy objective of full national employment. With the Smithsonian agreement, member states expected the dollar to return to the United States, but lower interest rates within the United States have led the U.S. dollar to continue to flow to foreign central banks. The influx of dollars into foreign banks continued the process of monetizing the dollar abroad, beating the objectives of the Smithsonian agreement. As a result, the price of the dollar in the goldless market continued to weigh on its official price; Shortly after the announcement of a 10% devaluation in February 1973, Japan and the EEC countries decided to let their currencies fluctuate.

This turned out to be the beginning of the collapse of the Bretton Woods system. The end of Bretton Woods was officially ratified by the Jamaican Agreements in 1976. In the early 1980s, all industrialized countries used floating currencies. [44] [45] The United States has put in place the European Marshall Plan to provide significant financial and economic assistance to the reconstruction of Europe, largely through subsidies rather than loans. The member countries of the Soviet bloc, for example. B Poland, were invited to receive the subsidies, but obtained a favorable agreement with the COMECON of the Soviet Union. [31] In a speech at Harvard University on June 5, 1947, U.S. Secretary of State George Marshall stated that there was a high degree of convergence among powerful nations, that the inability to coordinate exchange rates during the interwar period had exacerbated political tensions.