Reserve Accumulation and International Monetary Stability - Supplementary Information

Policy Papers, April 13, 2010

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The modern history of the IMS begins with a shift from a bimetallic system to the Gold Standard in the 1870s and 1880s.
Under the Gold Standard:
- Major national currencies were freely convertible to gold at a fixed exchange rate.
- Adjustment was largely undertaken through flexible prices, wages and income.
- The system survived up to the outbreak of the First World War.
After World War I:
- The Gold Standard was re-established in a modified form following a painful period of post-war disinflation.
- The economic and political strains of the Great Depression led to the system’s ultimate collapse in the 1930s.
Post-World War II arrangements:
- Negotiations between the U.K. and U.S. in the 1940s led to the Bretton Woods system of fixed and adjustable exchange rates tied to the dollar.
- The dollar was fixed to gold and the IMF was established to oversee the system.
- This system faced repeated strains.
Early 1970s transition:
- The dollar’s link to gold was broken and most major currencies began floating.
- The current arrangements centered on floating currencies were born.

The U.S. dollar remained the key reserve currency following the transition to floating currencies.
U.S. Treasury Bills are identified as the major reserve asset in the post-Bretton Woods system.

Title: Reserve Accumulation and International Monetary Stability - Supplementary Information
Publication date: April 13, 2010
Format available: Download PDF (as indicated on the landing page)
Citation form shown: Reserve Accumulation and International Monetary Stability - Supplementary Information, (USA: International Monetary Fund, 0) accessed 9/14/2026

Source: Reserve Accumulation and International Monetary Stability - Supplementary Information, April 13, 2010 (accessed 9/14/2026).