The Need for International Reserves and Credit Facilities (Publication of the Netherlands Institute of Bankers and Stock Brokers, 31)

International monetary economics essentially deals with three problems, viz. the nature and stability of the international monetary system, the balance of payments adjustment process, and international liquidity (reserves and credit facilities). All three categories are interrelated. The exchange rate system has an important bearing on the manner in which the adjustment process functions, as well as on the need for international liquidity. The adjustment process is an important determinant of the need for international liquidity. The adequacy of international liquidity influences the working of the adjustment process. Ultimately, developments in international liquidity and in the adjustment process determine the nature and stability of the international monetary system; a sustained malfunctioning of the adjustment process - brought about by a serious imbalance in international liquidity or by other causes - will bring about a new international monetary system, either through collapse or reform of the old system. This study deals only with the problem of international liquidity. However, it touches on the two other main aspects of international monetary economics insofar as they have a bearing on international reserves and credit facilities. In the literature international liquidity is most often defined as including international reserves (gold, SDRs, foreign exchange and claims on the IMF) and international credit facilities (IMF drawing rights, EEC support arrangements and central bank multilateral and bilateral credit facilities). This definition will also be followed in this study. Front Matter....Pages i-xi Introduction....Pages 1-3 Front Matter....Pages 5-5 Views on monetary reserves before 1914....Pages 7-18 The interwar period....Pages 19-31 The Second World War and Bretton Woods....Pages 32-39 Post-war developments: 1945–1960....Pages 40-55 Front Matter....Pages 57-57 Various approaches....Pages 59-91 Pure theory and some specific issues....Pages 92-120 Reserve needs under flexible exchange rates....Pages 121-131 Conditional liquidity, IMF quotas and SDR distribution....Pages 132-148 Front Matter....Pages 149-149 General propositions....Pages 151-161 Reserve needs of individual countries and country groups....Pages 162-198 Global reserve needs....Pages 199-216 The need for international credit facilities....Pages 217-232 Back Matter....Pages 233-252