World Monetary Reform

Abstract

The Basel meeting of the central bankers marked the beginning of an awakening by the European Economic Community to the necessity of world monetary reform. The Community finally, and long after the proverbial horse had bolted from the stable, pressed the United States to defend its own currency. The pressure was of a persuasive nature, since the central banks of the EEC and other central banks made arrangements with the BIS whereby the existing swap arrangements would be increased by $6250 million to $17,980 million — should the United States decide to defend its own currency. In fact, this persuasive pressure did bear rapid results, since the Federal Reserve Board started to intervene in the market to defend the dollar one day later, on 10 July.