ABSTRACT
This chapter reviews the importance of the international monetary and financial system for the world economy, highlighting its role in facilitating the cross-border flows of money and credit allowing firms, individuals and governments to trade with one another. The international monetary and financial system provides the necessary framework for the transfer and flows of money and credit. The chapter includes the different ways of designing and organising the world's international monetary and financial systems, including the gold standard, the gold-exchange standard and the post-Bretton Woods system of floating exchange rates that has been in existence since the early 1970s. The International Monetary Fund (IMF) was designed to manage and regulate the multilateral Bretton Woods currency system to maintain stability, ensure that countries current accounts were open and manage the fixed par rates between countries. The technological advances, economic liberalisation and integration associated with globalisation have further empowered capital at the expense of state control and labour.
