The Bretton Woods agreement failed in 1973 with President Richard Nixon unilaterally abandoning the gold standard. Other countries soon followed suit, first with Switzerland and other European nations and eventually the rest of the world.
The death of the Bretton Woods agreement did not end dreams of restoring a semblance of order and low volatility to the since-then troubled currency markets. One man who was already in government service as Chairman of the Fed in the wake of the agreement’s collapse was Paul Volcker. It was he who first seriously called for a new Bretton Woods Agreement back in 2014.
The old defunct 1944 based agreement had set up the U.S. dollar to be the global currency by linking and tying up its value to gold. This had produced thirty years of unprecedented stability in global currency markets and exchange rates. Volcker remembered the consequences of abandoning the agreement personally.
He observed that in the years since the agreement had ended, continuously recurring currency crises had plagued the world economy. Among these were the Mexican, Latin American, and Asian currency crises. In 2008, the global financial crisis and Great Recession had also rocked the world. This amounted to four major currency crises in only 35 years.
Paul Volcker argued convincingly that a new Bretton Woods Agreement would lead to an internationally coordinated financial and monetary system. This would provide much needed stability for the continuously troubled global economy. Such a renewed system would create rules to guide and foster better world monetary policy. He even foresaw the potential for a new global reserve currency that would take over from the U.S. dollar. This system would lead to a balanced equilibrium in various nations’ balance of payments. In this way, countries around the world would be able to maintain sufficient foreign exchange reserves.
Paul Volcker made all of these suggestions and observations as he chaired the Bretton Woods Committee meeting in 2014. As the Chair Emeritus, he leads the body of worldwide leaders who wish to rebuild cooperation among the various international financial institutions. Among these are the European-based International Monetary Fund, the U.S.-based World Bank, international major and important central banks, various national Treasuries, and influential private banks.
The Bretton Woods Committee arose in 1983 around the ten year anniversary of the failure of the Bretton Woods Agreement. Two former U.S. Treasury officials suggested that it be established, democrat Secretary Henry Fowler and republican Deputy Secretary Charls Walker. Both men recognized the urgent need for a concerted, overt effort to make sure that leading global citizens spoke up regarding the critical importance of the IFI International Financial Institutions. The yearly meetings have continued without fail since 1983, with the 2016 meeting representing the 33rd year of the annual meetings.
Bretton Woods Committee members are comprised of around 200 different leaders from the heads of finance, business, academics, and not for profit sectors of economies. This includes numerous former presidents, industry CEOs, lawmakers, and cabinet level officials. They all have one belief in common that it is essential to maintain international levels of economic cooperation which is most effectively achieved via strong and efficient IFIs. Through their work on the Bretton Woods Committee, they spearhead worldwide endeavors to encourage economic growth, to foster financial stability around the world, and to reduce poverty wherever they find it.
The Bretton Woods Committee today puts on regular conferences, educational opportunities, and seminars. A great number of these activities were developed in order to address a large segment of the public. Other events are more exclusive and provide the Bretton Woods Committee membership with the chance to give their support, insight, and constructive criticisms to the IFIs management teams.
The Bretton Woods Committee has a track record of successfully working with all U.S. administrations to remind the elected leaders of yesterday and today that the twin ideas of enduring national security and worldwide economic prosperity are inseparably linked and improved by continuous movement forward on multinational issues.