Word: bretton
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...French President François Mitterrand, whose government has been shaken for two years by the falling franc, argued for an overhaul of the international monetary system to bring about more stable exchange rates. Nothing so ambitious has been tried since 1944, when representatives of 44 nations met in Bretton Woods, N.H., and established a worldwide system of fixed exchange rates that endured for nearly 30 years (see box). Said Mitterrand: "The moment has come to think of a new Bretton Woods...
Said Treasury Secretary Donald Regan: "I don't think we're ready for Bretton Woods II. It'll take quite a bit of discussion and arranging. It's years away...
France's financial woes have damaged Mitterrand politically, and his call for a new Bretton Woods conference is, in part, an attempt to shift the blame for his problems to the system of floating exchange rates. But while Mitterrand's concerns about unstable currencies may be somewhat self-serving, they are shared by a growing number of prominent people. In recent weeks, Federal Reserve Board Chairman Paul Volcker, Investment Banker Felix Rohatyn and former West German Chancellor Helmut Schmidt have all talked of the need to dampen the swings in currency values. Former Secretary of State Henry Kissinger...
When currencies were set free to float in 1973, many economists predicted that exchange rates would move slowly and smoothly. Under Bretton Woods, currency values had only changed abruptly after crises sparked wild speculation. In addition, experts argued that with floating rates governments would no longer be forced to restrain their domestic economies just to bolster their currencies...
...days during July 1944, the West's financial leaders worked on a plan for a postwar world economic order at the rambling Mount Washington Hotel in Bretton Woods, N.H. The international money system they developed in that spectacular White Mountain setting was so successful that ten years after its collapse, some economists and politicians still long for a return to Bretton Woods...