The global economic architecture which evolved out of the historic 1944 Bretton Woods Conference comprised various international economic institutions (IEIs): the International Monetary Fund (IMF) established to promote macroeconomic stability; the General Agreement on Tariffs and Trade (GATT) – the predecessor of the World Trade Organization (WTO) – to ensure an open trading system; and the World Bank, to provide development finance for poverty reduction. The G7/G8 was established in the mid-1970s to oversee the IEIs and subsequently the Financial Stability Forum (FSF) was established in 1999 in response to the Asian Financial Crisis to promote financial stability and develop best practices for financial regulation and supervision. This relatively simple architecture, which worked well for a few decades, has now come under severe strain. One important reason is that the governance system of the old architecture does not reflect the move from a uni-polar to a multi-polar world. This process accelerated after the global financial crisis (GFC) of 2008–09, most notably the increased economic power of Asia, especially the People’s Republic of China (PRC) and India. Another is that policies of IEIs (e.g. charters, quotas and voting rights) were designed in the interests of the like-minded members in 1944 and are strongly protected by the original members. Third, the context in which the IEIs operate has also changed dramatically, particularly in the area of globalization of finance. Finally, many observers argued that the current architecture actually contributed to the development of the GFC.
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