Bretton Woods
Bretton Woods
Definition
Bret·ton Woods (bret′'n)
resort in the White Mountains, N.H.: site of a United Nations monetary conference (1944) at which the International Monetary Fund was established
Etymology: after Bretton Hall, Eng countryseat of one of the founders
Bretton Woods Finance Definition
An
agreement struck in the summer of 1944, in which the U.S., the U.K., and their
wartime allies set up the rules for the post-World War II monetary system. The
meeting set the structure for the International Monetary Fund (IMF) and the
International Bank for Reconstruction and Development (IBRD), which in the U.S.
is more commonly known as the World Bank. The comprehensive agreement called
for the participants to limit the movement of their currencies, which were set
against the dollar. The gold standard was maintained and the dollar retained
its value of $35 to an ounce of gold. That standard allowed the U.S. to finance
its balance of payments deficit by using dollars instead of gold. However, the
U.S. also retained the responsibility of converting dollars into gold on demand
from foreign central banks. The name Bretton Woods comes from the city in New
Hampshire where the wartime allies met.
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