Summary Global Financial system came into being with the help of Bretton Woods Agreement
LAHORE (Dunya News) – After World War II, America emerged as a Super Power and the already devastated countries of Europe were looking for someone who could help. The United States of America by considering it as a golden opportunity came in a position to implement its own financial system in the whole world.
Hence, the new world financial system got implemented under new American policies in 1944. Through this financial system, US were successfully been able to implement dollar as the global currency.
This new Global Financial system came into being with the help of Bretton Woods Agreement in which Dollar was officially recognized as a global currency. The approval of representatives from 44 countries was obtained through their signatures in this agreement.
Although, there were only 44 countries’ representatives present at the Bretton Woods Agreement, rest of the countries had to bow against the decision because of unavailability of better alternative.
Here, it is also worth-mentioning that the Bretton Woods Agreement also decided that the US Central Bank would issue currency notes against the gold reserves. However, the policy was implemented until 1971 when the new World Financial System was implemented and US backed from its original decision and decided to issue currency notes according to its will. Hence, the provisions of Bretton Woods Agreement came to its end.
Despite of the introduction of new financial system, the monopoly of dollar as a global currency could not be challenged as American currency was considered to be the powerful currency for decades and there were also no better alternatives.
Today, the United States is dictating terms over different political scenarios according to its will on the basis of dollar.
The story was originally published on Daily Dunya Sunday magazine
