Edited by Julio Faundez and Celine Tan
Chapter 4: Assessing International Financial Reform
Daniel Bradlow* INTRODUCTION 1. The foundations for the current international financial governance arrangements were laid at the Bretton Woods Conference in 1944. At this conference, which was attended by delegates from 44 countries, the International Monetary Fund (IMF or Fund) and the International Bank for Reconstruction and Development (IBRD) were created, with the IMF originally having US$8.5 billion in resources and the IBRD having US$7.67 billion in prescribed capital. The Fund’s function was to use its authority and financial resources to help create and support a rules-based international monetary system that was designed to maintain stable exchange rates and relatively free payments for current transactions (IMF Articles of Agreement: Art. I). The IMF was expected to use its surveillance authority to oversee the operation of the international monetary system and advise members on their balance of payments and the maintenance of the par value1 of their currencies. The founding states also anticipated that the IMF would use its financial resources to help those member states that were experiencing balance of payments problems to correct these problems in ways that were not destructive of international or domestic prosperity. The IMF’s Articles of Agreement made clear that, while its member * SARCHI Professor of International Development Law and African Economic Relations, University of Pretoria, and Professor of Law, Washington College of Law, American University, Washington DC, USA. The author wishes to thank Maya Berinzon for her research assistance. 1 Under the system established with the creation of the IMF, each state...
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