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International Financial System

The International Financial System

A history of how the gold standard, the Bretton Woods institutions, and the modern architecture of the IMF, the World Bank, and the wider global financial system evolved from the nineteenth century to the crises and debates of today.

Wikimedia Commons / US National Archives and Records Administration (RG 208, Roll 211) · Unknown (US government photographer) · Public domain (US government work)

60-Second Review

Express review

A condensed, point-by-point summary of the module, for reviewing right before a test or exam.

  1. From the Gold Standard to Bretton Woods. The classical gold standard collapsed in the interwar years, leading nations to design the Bretton Woods system in 1944.
  2. The Rise and Fall of the Bretton Woods System. The dollar-gold peg gave Bretton Woods stability until structural flaws forced its collapse and a shift to floating rates.
  3. Debt Crises and IMF Crisis Lending. The 1980s debt crisis and the 1997 Asian crisis reshaped IMF lending and reignited debate over its conditionality.
  4. Banking Regulation and Sovereign Debt. The BIS and the Basel Accords built international banking rules, while the Paris and London Clubs manage sovereign defaults.
  5. Global Institutions and Reserve Currencies. From the WTO to the AIIB and SDRs, the postwar order has been layered with new and rival institutions.
  6. The Eurozone and the 2008 Crisis. The euro’s creation and the 2008 financial crisis exposed both the promise and the fragility of monetary integration.
  7. Post-2008 Regulation and Emerging Market Risk. Post-crisis reforms targeted "too big to fail" banks, while emerging markets remained exposed to volatile capital flows.
  8. Money, Sanctions, and the Future of Global Finance. Cryptocurrencies, sanctions, and de-dollarization debates are reshaping the financial order built after Bretton Woods.

This is the starting point of International Financial System: you don't need any prior knowledge of this subject to begin.

Key points

Visual module map

1From the Gold Standard to Bretton Woods
2Debt Crises and IMF Crisis Lending
3Global Institutions and Reserve Currencies
4The Eurozone and the 2008 Crisis
5Money, Sanctions, and the Future of Global Finance

Alternative visual view: a simplified sequence of some of the module's key points, in their order within the syllabus.

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Final test

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Optional mini-games

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Review Flashcards

Review each key point with cards that flip to reveal the summary.

Memory

Match each concept with its definition in as few attempts as possible.

Time Attack

Answer true or false statements before time runs out.

Chronological Order

Put the module's key points back in their original order.

Further reading

Bibliography and cited sources used to create this module.

  • Eichengreen, B. (2008). Globalizing Capital: A History of the International Monetary System (2nd ed.). Princeton: Princeton University Press.
  • Steil, B. (2013). The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order. Princeton: Princeton University Press.
  • Reinhart, C. M. and Rogoff, K. S. (2009). This Time Is Different: Eight Centuries of Financial Folly. Princeton: Princeton University Press.
  • Stiglitz, J. E. (2002). Globalization and Its Discontents. New York: W.W. Norton & Company.
  • Boughton, J. M. (2001). Silent Revolution: The International Monetary Fund, 1979-1989. Washington, DC: International Monetary Fund.
  • International Monetary Fund. "Cooperation and Reconstruction (1944-71)." IMF History. https://www.imf.org/en/About/history/cooperation-and-reconstruction-1944-71