July 22 marks the 70th anniversary of the Bretton Woods Agreement, which despite its flaws is considered the reason behind a relatively extended period of global economic growth.
It established the rules for commercial and financial relations between the world’s most important industrial nations and its effects are still very much felt today.
Finance experts from over 40 countries gathered in the town of Bretton Woods in the US state of New Hampshire in 1944. After weeks of talks they agreed on a post-war monetary system.
Their motivation was a general belief that the inter-war financial system had been a disaster. During that period the world withnessed the Great Depression, the collapse of the gold standard and a rise in protectionism.
The agreement led to the creation of two global institutions that remain important today, the International Monetary Fund and the World Bank.
Critics have said both are dominated by the richest powers, however they have survived, unlike the Bretton Woods exchange rate system.
It linked all currencies to the dollar and the dollar linked to gold but it only lasted until the 1970s.