ABSTRACT
The scene returns to Paris, in March 1957. Every morning, a black Citroën carried a bespectacled foreign gentleman from a luxurious hotel on the Rue de Rivoli to the Ministry of Finance or the Banque de France. This gentleman, who had been staying in the Paris hotel for nearly one month, was overwhelming the officials in the French finance ministry with his bold gestures, despite working late into the night day after day. In France at this time, with restoration of convertibility of the franc imminent, the gentleman made the rounds arguing for discontinuation of provision of medium-term credit by the Banque de France and controlling inflation, having great influence over the political and official worlds of Paris as an advisor. This gentleman, already familiar to us, was the third IMF managing director, Jacobsson. Now seeing as problematic the fact that the liquidity policies of medium-term credit that he himself had participated in advocating before the war had been applied without restriction to the French housing sector, Jacobsson remained in Paris burning with the conviction that this system needed to be discontinued in order to have France reintegrated to free markets.1 Just what kind of a system was this Bretton Woods system, under which the IMF managing director himself marched in to provide guidance on a course of action of liberalization? Through what route was a former head of the Monetary and Economic Department at the BIS appointed to the top position at the IMF? And what was the BIS's position in this system? These are the topics addressed in this chapter.
