ABSTRACT

Whereas official negotiations on reform in the earlier period focused very largely on alternative methods of providing additional liquidity, now, as the crises deepened, these negotiations were increasingly directed at more comprehensive reform of the international monetary system. Two distinct phases in these new negotiations can be identified. An earlier phase was largely concerned with correcting the weaknesses of the Bretton Woods Agreement while, at the same time, preserving the par value system. By late 1973, however, and particularly after the oil price shock, when it became evident that a par value regime was no longer viable, attention began to focus on ‘how to live’ with managed floats, on developing rules of the game in the new environment and on resolving a number of problems carried over from the previous regime.