This chapter reviews the architecture and shortcomings in the operation of the international monetary system. It examines the two major problems facing the international monetary system, and evaluates proposals for possible solutions. There is a great deal of dissatisfaction with the architecture and functioning of the international monetary system. This dissatisfaction gives rise to persistent calls for reforms. Dissatisfaction with the functioning of the current international monetary system arises because of misalignments among the world's leading currencies and because of the system's inability to prevent or resolve quickly international financial crises in emerging markets. Blame for the failure to encourage nations to eliminate their internal disequilibria and to promote greater co-ordination of macroeconomic policies among the leading industrial countries can be placed squarely on the international monetary system. The International Monetary Fund concluded that exchange rate volatility did not seem to have exerted a significantly adverse effect on international trade.