Conclusion and Summary: Future of the Global Monetary and Financial System roundtable

The CFS co-organized a “Future of the Global Monetary and Financial System: 75 years after Bretton Woods” roundtable with the Euro 50 Group. The roundtable gathered high-level personalities coming from all over the world.

My final takeaways are:

  • First, the time is right for the Bretton Woods Institutions (BWIs) to exercise greater leadership. The IMF is uniquely situated to help govern effectively and navigate in an increasingly complex and challenging world. But, with greater complexities and areas of engagement comes the risk of mission creep.
  • Second, the international monetary and financial system would benefit from a move with great purpose over time to a more rules-based system.
  • Third, policy actions today would benefit from a system-wide and longer-term perspective.

A roundtable summary and conclusions are available at

The conference agenda and bios are available at

Aliber’s “Reflections on Bretton Woods”

Robert Z. Aliber offers his “Reflections on Bretton Woods.” Bob is professor emeritus of International Economics and Finance at the University of Chicago, co-author of Manias, Panics, and Crashes: A History of Financial Crises, and a good friend of CFS.

Bob covers much ground. Topics include:

  • The White Mountains, Cog Railroad, and Mount Washington Hotel.
  • Bretton Woods Conferences.
  • How the Founders of Bretton Woods might view the last 75 years.
  • Trade and Tariffs.
  • The IMF.

The full report is available at

Schuler on “Just Before Bretton Woods: The Atlantic City Conference”

CFS senior fellow Kurt Schuler presented on “Just before Bretton Woods: The Atlantic City Conference” at an event organized by the Treasury Historical Association.

Kurt’s presentation on the conference that laid the groundwork for Bretton Woods is available at

His talk is based on a forthcoming book of the conference minutes that he is working on with co-editor Gabrielle Canning.

The 75th anniversary of Bretton Woods … and Atlantic City

The Bretton Woods conference, which established the International Monetary Fund and the World Bank, was held from July 1-22, 1944 and remains widely known today, 75 years later. Far less known is the smaller conference that immediately preceded it in Atlantic City, New Jersey, from June 15-30, 1944. Only 17 countries attended, as opposed to 44 at Bretton Woods, and the conference was closed to the press, whereas at Bretton Woods dozens of journalists were present. Not much has ever been written about the Atlantic City conference, in contrast to a number of books and hundreds of articles that have examined Bretton Woods and its legacy.

To commemorate the 70th anniversary of Bretton Woods, in 2014 the Center for Financial Stability held a conference in the same location, the Mount Washington Hotel in Bretton Woods, New Hampshire. The conference featured papers that can be found elsewhere on the CFS Web site and the presentation of The Bretton Woods Transcripts, a book of previously unpublished conference material that I edited with Andrew Rosenberg and that the CFS published.

For the 75th anniversary, the CFS later this year will issue a book edited by me and Gabrielle Canning, a young scholar who, conveniently, is my neighbor. The book, Just before Bretton Woods: The Atlantic City Financial Conference, June 1944, collects American and British archival documents that present a detailed picture of what happened at Atlantic City. The Atlantic City conference developed the draft agreements for the IMF and the World Bank from which the Bretton Woods conference proceeded. It is accurate to say that Atlantic City made the World Bank possible. Whereas there was already an internationally agreed statement on the principles to govern the IMF before Atlantic City, no similar statement existed for the World Bank. At Atlantic City, the two leading delegations, from the United States and Britain, found that their ideas about the Bank were close enough to assemble quickly a draft that was also broadly agreeable to the other countries present.

Crisis Detection and Prevention

I discuss crisis detection and prevention based on experiences chairing an inter-agency crisis prevention group (while at the U.S. Treasury), working as a strategist on Wall Street, and advising a global macro hedge fund. The paper was published as a chapter in “The 10 Years After” the financial crisis volume published by the Reinventing Bretton Woods Committee.

My views differ from many recently offered.

I conclude with eight actionable ideas to improve crisis detection for investors and officials.

For full remarks:

International Money: Interview with Professor Richard N. Cooper

Professor Richard N. Cooper – advisor to many U.S. Presidents on international monetary affairs – was recently interviewed by the Center for Financial Stability on his decades of experience at the center of international monetary policy.

Highlights include:

  • Evolution of the international monetary system,
  • Insights into Nixon Shock (cessation of the gold standard),
  • System of floating exchange rates,
  • Recent revelations regarding the 1944 Bretton Woods Conference,
  • China and measures to move forward,
  • Proposals for the future.

We thank Kurt Schuler and Robert Yee for such a wonderfully insightful exchange and Richard Cooper – Maurits C. Boas Professor of International Economics at Harvard and formerly Under-Secretary of State for Economic Affairs, and Chairman of the Federal Reserve Bank of Boston.

To view the full interview:

Hanke on IMF pressure from politicians…

The FT published my letter “Not the first time IMF has succumbed to pressure from politicians.”

A recent FT editorial as well as story indicated that the IMF’s Independent Evaluation Office found that the “IMF repeatedly succumbed to political pressure from European governments during the eurozone debt crisis”.

This is not the first and only case in which the International Monetary Fund has been manipulated by politicians, and it certainly is far from the worst.

The full letter is available at

Future and History of Global Capital Markets

CFS partner, Jack Malvey from BNY Mellon, created a wonderful guide to financial market history and factors driving change into the 21st Century.

We are grateful to Jack for allowing us to share his presentation with CFS friends.

Although we rarely distribute outside research, today, markets confront challenges of epic proportion. Simply put, a glance back at the last thirty years is insufficient.

Analytics, data, and an appreciation of history are in our DNA. Hence, CFS hosted “Bretton Woods: The Founders and the Future” with long-term takeaways for markets and economies. Similarly, Senior Fellow Kurt Schuler’s Historical Financial Statistics (HFS) database – with contributions from over 80 academics – is a treasure trove of information and a popular part of our website.

Most importantly, thanks again to Jack for sharing his outstanding work integrating the past with the future. It is no wonder that a recent Bloomberg story referenced him as “one of the most-respected figures in the bond market.”

Given the enormous scope of coverage, Jack would be grateful for any thoughtful commentary.

The full presentation is:

Australia at Bretton Woods

Selwyn Cornish and I have a CFS working paper out on “Australia’s Full Employment Proposals at Bretton Woods: A Road Only Partly Taken.”

At the Bretton Woods conference, Australia proposed that full employment be a primary goal of international economic cooperation. Australia’s ideas were connected with its historical experience: three enormous financial and economic shocks in the two generations before Bretton Woods that disrupted employment.

The United States in particular opposed Australia’s proposals. They did receive a hearing after Bretton Woods, but never became part of the fabric of international economic cooperation. Happily for Australia, since Bretton Woods it has avoided shocks of the magnitude it experienced in the two generations before. Australia’s proposals remain of interest, though, both because many countries are still far from full employment and because the Bretton Woods institutions have become involved in labor market reforms as part of broader structural economic reforms in member countries.

The paper takes advantage of the knowledge of Australian archives that Selwyn Cornish has built up over the course of his career, which includes a longtime position as the official historian of the Reserve Bank of Australia. I presented the paper at a conference about Bretton Woods held at Yale University in November. A revised version will likely appear in a volume springing from the conference, to be published by Yale University Press. Selwyn and I welcome comments, which we will consider for incorporation into the revised version.

The Money Makers

Eric Rauchway’s new book The Money Makers: How Roosevelt and Keynes Ended the Depression, Defeated Fascism, and Secured a Prosperous Peace will interest most of you who read this blog. The economic parallels between the 1930s and recent years are more instructive than we may care to admit.

Eric Rauchway is a professor of history at the University of California-Davis. He spoke at the CFS conference at Bretton Woods last year, giving a foretaste of some of the material in the book. The subtitle gives a pretty complete idea of what the book is about. Franklin Delano Roosevelt is first in the subtitle as he is dominant in the book. Rauchway is determined to rescue FDR’s reputation from former advisers who had their own agenda to promote when they wrote, years later, that FDR was a dilettante with no real understanding of monetary policy. Rauchway argues that FDR had coherent ideas and that his policy on the gold standard through the whole of his administration was well considered both in its economics and its politics. Rauchway points out that FDR made some formal study of economics as a student at Harvard; that well before his presidential bid he showed interest in monetary questions; and, perhaps most important of all, he was open to ideas and sources considered unorthodox, such as the Cornell University professor George Warren Pearson.

As one who is no expert on FDR but who has worked for two politicians, I have observed that politicians rarely have the time or inclination to become expert on the arcana of monetary theory and policy. However, the astute ones—and FDR was a superlatively astute politician—have an ability to rank issues, examine varying views on them more open-mindedly than many experts (because they are less attached to particular approaches), and gauge whether public opinion on them is ripe for change. FDR came into office facing economic catastrophe, and he found a way out that worked.

A generation later, Milton Friedman and Anna Schwartz would argue that the Federal Reserve bore a large measure of blame for the Depression, and that different policy by the Fed would have avoided deflation and limited the downturn to being an ordinary recession. Over the course of another generation, other economists would come to accept their argument. In 1933, FDR did not have the luxury of waiting for those conclusions and he lacked control of the Fed. The gold policy was the one tool at his disposal. I think Rauchway exaggerates the depth of FDR’s monetary thought, but he is correct that FDR’s gold policy—which jolted the American economy back to life—showed a high level of strategic thinking. The advisers who later branded FDR a dilettante misunderstood that he was in reality an experimenter, willing to be unorthodox and eclectic because the times called for experimentation.

What FDR gave with one hand, though, he partly took away with the other. Many of the regulatory policies of the New Deal hampered recovery, working against the benefits of appropriately loose monetary policy. As with the responsibility of the Federal Reserve for creating or at least greatly aggravating the Depression, Rauchway glosses over the clumsiness of New Deal regulation and the harm it did.

The book really shines in its weaving of the interplay between monetary policy, wider economic policy, domestic politics, and geopolitics. The Depression was more than an economic calamity: it threatened to cast the world political order into the flames. FDR understood the dangers posed by aggressive dictatorships and the role that economic policy could play in helping contain them in peace and winning the fight against them in war. Rauchway assesses the interplay between the economic and political forces of the time more judiciously than any previous account I have read.

I will not discuss Keynes, who also appears in the book’s subtitle, because here both Rauchway and I have less to say that might be new to you, though it will be new to the average reader. Suffice it to say that, as with the material on Roosevelt, it ably assesses both the economics and the politics of the time.

Did I mention that Rauchway can really write? He has an ability to keep different narrative threads clear through the warp and woof of events. He also has a knack for crisp summary (example: in 1944 “The United Nations was still very much a notion; so too were many of the nations in it” under German or Japanese occupation.)

The book is pleasing to the eye and to the hand. I have only one complaint for the publisher: having met Eric Rauchway in person, I can attest that the jacket photo does not do him justice. Something to be corrected for the paperback edition, perhaps.