by Machlup
[Front Matter and Publication Details]: Front matter for Fritz Machlup's 1968 book on the Rio Agreement, including copyright information, publication details by The Johns Hopkins Press, and the CED Supplementary Paper authorization. It lists the Editorial Board members and the Research Advisory Board, featuring prominent economists like Edward S. Mason, Otto Eckstein, and Charles P. Kindleberger. [Table of Contents]: A detailed table of contents outlining the six main parts of the essay, ranging from preliminary international discussions to the technicalities of the new SDR system, semantic explanations, and unfinished business in the international monetary sphere. It also lists five appendices including the IMF Articles of Agreement and statistical tables. [Foreword by Howard C. Petersen]: The Foreword, written by Howard C. Petersen of the CED, contextualizes the book within the volatile economic climate of the late 1960s, citing the devaluation of the pound and gold speculation. It introduces Machlup's analysis of Special Drawing Rights (SDRs) as a new form of central bank reserve asset and emphasizes the paper's role in exploring liquidity, adjustment, and confidence in the global monetary system. [Introduction: The Art of Linguistic Pragmatism]: Machlup introduces the essay by highlighting the 'linguistic pragmatism' required to reach the Rio Agreement. He argues that the agreement's success relied on avoiding 'excessively clear language' to allow different nations to interpret the new 'facility' according to their own domestic political needs. He provides a roadmap for the six parts of the essay and the accompanying appendices. [1. Preliminary International Discussions]: This section chronicles the four-year history of international negotiations leading to the Rio Agreement, starting with the 1961 Vienna meeting. It tracks the formation of the Group of Ten, the commissioning of studies on international liquidity, the work of the Ossola Committee, and the pivotal role of the Emminger study. The narrative details the shift from initial recognition of system flaws to the joint meetings between the IMF and the Group of Ten that eventually produced the 'Outline' for the new system. [2. Agreement Despite Disagreement]: Machlup analyzes how political agreements are often reached through deliberate ambiguity. He compares the Rio Agreement to the Bretton Woods compromise, where Keynes and White presented the same agreement to their respective audiences as either a departure from or a continuation of the gold standard. In Rio, the conflict between the French (viewing SDRs as credit) and the Americans (viewing SDRs as reserve assets) was resolved by scrubbing controversial terms like 'credit' and 'reserve' from the official text, allowing all parties to claim victory. [3. The New System: The Giro System and Allocation]: Machlup explains the mechanics of the new SDR system, describing it as a 'giro system' for central banks where balances are transferred rather than withdrawn. He details the allocation process based on IMF quotas, the 85 percent majority vote requirement (giving the EEC a veto), and the 'opting out' provisions. He notes that while specific amounts were not fixed in the Outline, the system is designed to supplement existing reserves like gold and dollars. [The Use of SDR's and Quantitative Limits]: This section details the rules for using SDRs, including the requirement for 'balance-of-payments needs' and the mechanism for acquiring convertible currencies. Machlup explains the quantitative limits on both the use of SDRs (the 70% average holding rule over five years) and the obligation to accept them (limited to three times a participant's allocation). He provides a numerical example using the United States' quota to illustrate how these limits interact between deficit and surplus countries. [A Hierarchy of Rules for Transfers]: Machlup outlines the 'pecking order' or hierarchy of rules that the IMF uses to determine which participants should receive SDRs in a transfer. These criteria include the strength of a country's balance of payments and reserve position, as well as the ratio of their SDR holdings to total reserves. He notes potential inconsistencies in these rules that require further reconciliation. [The Equality and Balance Criteria for SDR Holdings]: Machlup analyzes the procedural rules for directing SDR drawings, distinguishing between the 'equality criterion' (a long-run target for proportional holdings) and the 'balance criterion' (the desirability of a balanced relationship between SDRs and other reserves). He notes the inconsistencies in the Outline's rules and explains that the equality criterion depends on consistent definitions of total reserves. [Statistical Disparities in Quotas and Reserves]: This section examines the practical difficulty of aligning SDR holdings with total reserves due to the discrepancy between IMF quotas and actual reserve holdings. Using 1967 data, Machlup demonstrates that the EEC countries (the 'Five') held a much higher share of reserves than quotas, while the 'Other 96' countries held higher quotas than reserves, creating 'supra-equiproportional' holdings at the moment of allocation. [A Glossary of Terms for SDR Holdings]: Machlup proposes a precise glossary of terms to facilitate the analysis and operation of the Special Drawing Account. He defines various levels of holdings, including 'excess', 'super-excess', 'equiproportional', and 'supra-equiproportional' holdings, providing a model for a convenient tabulation of participants' current SDR positions. [Tabulation Model and Accounting Procedures]: Presents a model table for tracking SDR positions and discusses the accounting mechanics of the Special Drawing Account. Machlup clarifies that the Account acts as an agent rather than a central debtor, and explains how interest is credited to excess holders and assessed to participants based on cumulative allocations. [The Gold-Value Guarantee and the Two-Tier Gold Market]: Machlup discusses the gold-value guarantee of SDRs in the context of the March 1968 decision to stop official interventions in the London gold market. He argues that the establishment of a two-tier market effectively decouples the official 'par value' of currencies from private market fluctuations, thereby securing the gold-value guarantee for SDR holders. [The Sense of the Whole Scheme: Nondebt-Money]: Machlup identifies the 'liquidation of the fiction of the central debtor' as a major breakthrough in monetary thinking. He defines SDRs as 'nondebt-money'—assets that are internationally acceptable without being the legal liability of an issuing agency, drawing a parallel to the historical function of gold. [Future Projections and the 85 Per Cent Vote]: Machlup provides a statistical snapshot of 1967 reserves and projects the future role of SDRs, suggesting they could eventually overtake gold as the primary reserve asset. He also addresses the political hurdle of the 85% voting requirement, arguing that economic necessity will likely overcome French or EEC resistance to activation. [Background and Implications: The Purposes of Creating Liquidity]: Machlup critiques the 'naive' view that reserves are needed to 'finance' trade, arguing instead that they serve to prevent governments from adopting restrictive policies during payments deficits. He explores the indirect connection between reserve levels and the liberalization of trade and capital movements. [The Liberalizing Influence and Statistical Analysis]: Explains how SDR allocations create a net surplus in the combined balances of payments of all participants. Machlup provides a detailed statistical simulation using 1965 and 1966 data to show how a 10% SDR allocation would have moved several deficit countries into surplus positions, potentially averting restrictive economic policies. [Inflationary Impact and Resource Transfer]: Machlup compares the inflationary potential of SDRs versus gold, arguing that SDRs are less inflationary because they are not 'earned' through the initial surrender of real resources. He also discusses the 'resource-transferring' effects of the system, noting that while the scheme is intended for temporary swings, the 70% net use rule allows for longer-term transfers from surplus to deficit countries. [To Whom Shall Be Given? Distribution Strategies]: Reviews various historical proposals for the distribution of new reserves, including those by Stamp, Triffin, and Harrod that linked liquidity to development aid. Machlup contrasts these with the 'Rich-Man's Club' approach of the Group of Ten, which favored limiting participation to credit-worthy industrial nations to ensure the 'backing' and stability of the new asset. [Universality and the Myth of Backing]: Machlup celebrates the adoption of 'universality' and the rejection of the 'myth of backing'. He argues that money does not need 'backers' (collateral or central debtors) but 'takers' (agreement of participants to accept the asset). The Rio Agreement is seen as a breakthrough that establishes SDRs as fiduciary assets based on international agreement rather than debt. [SDRs as a Boon for Developing and Deficit Countries]: Analyzes the impact of SDRs on less-developed and chronic-deficit countries. Machlup argues that while the direct financial aid to developing countries is small, the indirect benefits—through the liberalization of trade and aid by industrial countries—are significant. He also explains how SDR creation can break the 'vicious circle' where the US must run a deficit to satisfy the reserve aspirations of the rest of the world. [The Problem of Confidence and Reserve Currencies]: Machlup warns that the Rio Agreement solves the liquidity problem but leaves the 'confidence problem' (the potential for massive conversions of dollars/pounds into gold) largely unaddressed. He categorizes the four pillars of international monetary reform: liquidity, confidence, adjustment, and development aid, noting that the latter three still require urgent attention. [Semantic and Theoretic Explanations: Money vs. Credit]: Machlup explores the semantic confusion between 'money' and 'credit' in the SDR debate. He analyzes the various meanings of credit (confidence, loans, bookkeeping entries) and argues that while SDRs can be viewed as credit in some senses, they are fundamentally a form of money creation without credit extension, as they do not involve a loans-and-securities portfolio. [The Nature of Reserve Assets and Credit Facilities]: Machlup analyzes the permanence of various international reserve assets, distinguishing between temporary credit facilities and permanent reserve creation. He examines how existing assets like gold, foreign exchange, and IMF positions fluctuate in permanence and discusses three types of credit-based reserve schemes, noting that the adopted Rio Agreement most closely resembles the creation of permanent assets without traditional lending. [Reconstitution versus Repayment and the Transfer of Real Resources]: This section explores the semantic and economic differences between 'reconstitution' of SDR balances and 'repayment' of debt, addressing French and German interpretations. Machlup argues that while individual behavior may be similar, the systemic effect differs because SDRs are transferred rather than destroyed upon reconstitution; he also discusses the transfer of real resources and the equivalence of money not spent versus credit not used. [SDRs as Credit and Money: A Semantic Analysis]: Machlup provides a systematic breakdown of legitimate and illegitimate statements regarding whether SDRs constitute 'credit' or 'money'. He concludes that SDRs function as money within the circle of participating monetary authorities as a means of payment for convertible currencies, despite failing traditional definitions used for private transactions or units of account. [Unfinished Business: The US Payments Deficit and the Dollar Overhang]: The author addresses the 'unfinished business' of the international monetary system, focusing on the persistent US balance of payments deficit since 1950 and the resulting 'overhang' of foreign-held dollars. He critiques selective corrective measures and explains how private asset switching and gold speculation threaten US gold reserves, leading to the 1968 decision to halt Gold Pool sales to private parties. [Strategies for Restoring Balance and Confidence]: Machlup evaluates various methods for restoring international balance, including direct controls, partial devaluations (like the interest-equalization tax), and real adjustment through demand or exchange-rate changes. He argues against doubling the gold price due to inflationary risks and critiques the 'item-picking' approach to deficit correction, suggesting that market forces often bypass selective governmental restrictions. [Proposed Reforms: Pooling Reserves and Cutting the Gold Link]: The author proposes radical reforms to restore confidence, including 'locking in' official dollar holdings or pooling all gold and reserve currencies into a central IMF Reserve-Settlement Account. He also discusses the possibility of the US unilaterally cutting the link between the dollar and gold, which would force other countries to decide whether to peg to the dollar, let it float, or implement exchange controls. [Appendix A: Outline of a Facility Based on Special Drawing Rights]: This appendix provides the formal outline for the Special Drawing Rights facility within the IMF. It details the establishment of the Special Drawing Account, principles for the allocation and cancellation of SDRs, the obligations of participants to provide currency, and the rules for the use and reconstitution of these rights. [Appendix B: List of Articles and Sections of the IMF Agreement]: A comprehensive list of the original and amended Articles of Agreement of the International Monetary Fund. It enumerates the sections covering purposes, quotas, par values, transactions, capital transfers, and the newly added articles (XXI to XXXII) concerning Special Drawing Rights and the Special Drawing Account. [Articles XXIV-XXVI: Allocation, Operations, and Interest of Special Drawing Rights]: This section outlines the regulatory framework for the allocation, cancellation, and operational use of Special Drawing Rights (SDRs). It details the principles governing SDR distribution, the requirements of 'need' for transactions between participants, and the obligations of participants to provide currency. Additionally, it covers the financial mechanics of the Special Drawing Account, including interest rates, charges, and assessments. [Articles XXVII-XXXI: Administration, Obligations, Suspension, and Liquidation]: This segment covers the administrative and legal governance of the Special Drawing Account and General Account. It specifies the general obligations of participants, procedures for the suspension of SDR transactions in emergencies or cases of failure to fulfill obligations, and the legal process for the termination of participation or the final liquidation of the Special Drawing Account. [Explanation of Terms and Proposed Modifications of Original Articles]: This section outlines the proposed modifications to the original IMF Articles of Agreement as of 1967. It details changes in voting requirements, specifically the shift to 85 percent majorities for key decisions, and explains the legal separation between the Fund's General Account and the new Special Drawing Account. It also discusses the formalization of gold-tranche purchases and the introduction of remuneration for members whose currencies are used by the Fund. [Appendix D: Proposed Additions to the Articles of Agreement (Articles XXI-XXXII)]: A comprehensive legal transcript of the twelve new Articles (XXI to XXXII) added to the IMF Articles of Agreement to establish Special Drawing Rights. It covers the authority to allocate SDRs, the separation of the General and Special Drawing Accounts, principles for allocation and cancellation based on global reserve needs, the obligation of designated participants to provide currency, rules for reconstitution of holdings, and procedures for termination or liquidation of the account. [Schedules F through I: Designation, Reconstitution, and Liquidation]: This segment contains the technical schedules (F, G, H, and I) governing the practical operation of the SDR facility. It defines the rules for designating participants to provide currency based on reserve strength, the specific 30 percent average holding requirement for reconstitution, and the detailed multi-year procedures for settling accounts when a participant terminates its membership or the entire account is liquidated. [Appendix E: Impact of Hypothetical Allocation of SDRs on Balances of Payments]: A detailed statistical appendix presenting a hypothetical 10% SDR allocation across 106 IMF member countries based on 1966 quotas. The table compares official balance of payments surpluses and deficits for 1965 and 1966 against 'corrected' balances that include the hypothetical SDR allocations, illustrating how the new facility would have mitigated deficits for various developed and developing nations. [Index]: A comprehensive alphabetical index for the book 'Remaking the International Monetary System', covering key terms, concepts, organizations, and individuals mentioned throughout the text, from 'Adjustment' to 'Zijlstra'.
Front matter for Fritz Machlup's 1968 book on the Rio Agreement, including copyright information, publication details by The Johns Hopkins Press, and the CED Supplementary Paper authorization. It lists the Editorial Board members and the Research Advisory Board, featuring prominent economists like Edward S. Mason, Otto Eckstein, and Charles P. Kindleberger.
Read full textA detailed table of contents outlining the six main parts of the essay, ranging from preliminary international discussions to the technicalities of the new SDR system, semantic explanations, and unfinished business in the international monetary sphere. It also lists five appendices including the IMF Articles of Agreement and statistical tables.
Read full textThe Foreword, written by Howard C. Petersen of the CED, contextualizes the book within the volatile economic climate of the late 1960s, citing the devaluation of the pound and gold speculation. It introduces Machlup's analysis of Special Drawing Rights (SDRs) as a new form of central bank reserve asset and emphasizes the paper's role in exploring liquidity, adjustment, and confidence in the global monetary system.
Read full textMachlup introduces the essay by highlighting the 'linguistic pragmatism' required to reach the Rio Agreement. He argues that the agreement's success relied on avoiding 'excessively clear language' to allow different nations to interpret the new 'facility' according to their own domestic political needs. He provides a roadmap for the six parts of the essay and the accompanying appendices.
Read full textThis section chronicles the four-year history of international negotiations leading to the Rio Agreement, starting with the 1961 Vienna meeting. It tracks the formation of the Group of Ten, the commissioning of studies on international liquidity, the work of the Ossola Committee, and the pivotal role of the Emminger study. The narrative details the shift from initial recognition of system flaws to the joint meetings between the IMF and the Group of Ten that eventually produced the 'Outline' for the new system.
Read full textMachlup analyzes how political agreements are often reached through deliberate ambiguity. He compares the Rio Agreement to the Bretton Woods compromise, where Keynes and White presented the same agreement to their respective audiences as either a departure from or a continuation of the gold standard. In Rio, the conflict between the French (viewing SDRs as credit) and the Americans (viewing SDRs as reserve assets) was resolved by scrubbing controversial terms like 'credit' and 'reserve' from the official text, allowing all parties to claim victory.
Read full textMachlup explains the mechanics of the new SDR system, describing it as a 'giro system' for central banks where balances are transferred rather than withdrawn. He details the allocation process based on IMF quotas, the 85 percent majority vote requirement (giving the EEC a veto), and the 'opting out' provisions. He notes that while specific amounts were not fixed in the Outline, the system is designed to supplement existing reserves like gold and dollars.
Read full textThis section details the rules for using SDRs, including the requirement for 'balance-of-payments needs' and the mechanism for acquiring convertible currencies. Machlup explains the quantitative limits on both the use of SDRs (the 70% average holding rule over five years) and the obligation to accept them (limited to three times a participant's allocation). He provides a numerical example using the United States' quota to illustrate how these limits interact between deficit and surplus countries.
Read full textMachlup outlines the 'pecking order' or hierarchy of rules that the IMF uses to determine which participants should receive SDRs in a transfer. These criteria include the strength of a country's balance of payments and reserve position, as well as the ratio of their SDR holdings to total reserves. He notes potential inconsistencies in these rules that require further reconciliation.
Read full textMachlup analyzes the procedural rules for directing SDR drawings, distinguishing between the 'equality criterion' (a long-run target for proportional holdings) and the 'balance criterion' (the desirability of a balanced relationship between SDRs and other reserves). He notes the inconsistencies in the Outline's rules and explains that the equality criterion depends on consistent definitions of total reserves.
Read full textThis section examines the practical difficulty of aligning SDR holdings with total reserves due to the discrepancy between IMF quotas and actual reserve holdings. Using 1967 data, Machlup demonstrates that the EEC countries (the 'Five') held a much higher share of reserves than quotas, while the 'Other 96' countries held higher quotas than reserves, creating 'supra-equiproportional' holdings at the moment of allocation.
Read full textMachlup proposes a precise glossary of terms to facilitate the analysis and operation of the Special Drawing Account. He defines various levels of holdings, including 'excess', 'super-excess', 'equiproportional', and 'supra-equiproportional' holdings, providing a model for a convenient tabulation of participants' current SDR positions.
Read full textPresents a model table for tracking SDR positions and discusses the accounting mechanics of the Special Drawing Account. Machlup clarifies that the Account acts as an agent rather than a central debtor, and explains how interest is credited to excess holders and assessed to participants based on cumulative allocations.
Read full textMachlup discusses the gold-value guarantee of SDRs in the context of the March 1968 decision to stop official interventions in the London gold market. He argues that the establishment of a two-tier market effectively decouples the official 'par value' of currencies from private market fluctuations, thereby securing the gold-value guarantee for SDR holders.
Read full textMachlup identifies the 'liquidation of the fiction of the central debtor' as a major breakthrough in monetary thinking. He defines SDRs as 'nondebt-money'—assets that are internationally acceptable without being the legal liability of an issuing agency, drawing a parallel to the historical function of gold.
Read full textMachlup provides a statistical snapshot of 1967 reserves and projects the future role of SDRs, suggesting they could eventually overtake gold as the primary reserve asset. He also addresses the political hurdle of the 85% voting requirement, arguing that economic necessity will likely overcome French or EEC resistance to activation.
Read full textMachlup critiques the 'naive' view that reserves are needed to 'finance' trade, arguing instead that they serve to prevent governments from adopting restrictive policies during payments deficits. He explores the indirect connection between reserve levels and the liberalization of trade and capital movements.
Read full textExplains how SDR allocations create a net surplus in the combined balances of payments of all participants. Machlup provides a detailed statistical simulation using 1965 and 1966 data to show how a 10% SDR allocation would have moved several deficit countries into surplus positions, potentially averting restrictive economic policies.
Read full textMachlup compares the inflationary potential of SDRs versus gold, arguing that SDRs are less inflationary because they are not 'earned' through the initial surrender of real resources. He also discusses the 'resource-transferring' effects of the system, noting that while the scheme is intended for temporary swings, the 70% net use rule allows for longer-term transfers from surplus to deficit countries.
Read full textReviews various historical proposals for the distribution of new reserves, including those by Stamp, Triffin, and Harrod that linked liquidity to development aid. Machlup contrasts these with the 'Rich-Man's Club' approach of the Group of Ten, which favored limiting participation to credit-worthy industrial nations to ensure the 'backing' and stability of the new asset.
Read full textMachlup celebrates the adoption of 'universality' and the rejection of the 'myth of backing'. He argues that money does not need 'backers' (collateral or central debtors) but 'takers' (agreement of participants to accept the asset). The Rio Agreement is seen as a breakthrough that establishes SDRs as fiduciary assets based on international agreement rather than debt.
Read full textAnalyzes the impact of SDRs on less-developed and chronic-deficit countries. Machlup argues that while the direct financial aid to developing countries is small, the indirect benefits—through the liberalization of trade and aid by industrial countries—are significant. He also explains how SDR creation can break the 'vicious circle' where the US must run a deficit to satisfy the reserve aspirations of the rest of the world.
Read full textMachlup warns that the Rio Agreement solves the liquidity problem but leaves the 'confidence problem' (the potential for massive conversions of dollars/pounds into gold) largely unaddressed. He categorizes the four pillars of international monetary reform: liquidity, confidence, adjustment, and development aid, noting that the latter three still require urgent attention.
Read full textMachlup explores the semantic confusion between 'money' and 'credit' in the SDR debate. He analyzes the various meanings of credit (confidence, loans, bookkeeping entries) and argues that while SDRs can be viewed as credit in some senses, they are fundamentally a form of money creation without credit extension, as they do not involve a loans-and-securities portfolio.
Read full textMachlup analyzes the permanence of various international reserve assets, distinguishing between temporary credit facilities and permanent reserve creation. He examines how existing assets like gold, foreign exchange, and IMF positions fluctuate in permanence and discusses three types of credit-based reserve schemes, noting that the adopted Rio Agreement most closely resembles the creation of permanent assets without traditional lending.
Read full textThis section explores the semantic and economic differences between 'reconstitution' of SDR balances and 'repayment' of debt, addressing French and German interpretations. Machlup argues that while individual behavior may be similar, the systemic effect differs because SDRs are transferred rather than destroyed upon reconstitution; he also discusses the transfer of real resources and the equivalence of money not spent versus credit not used.
Read full textMachlup provides a systematic breakdown of legitimate and illegitimate statements regarding whether SDRs constitute 'credit' or 'money'. He concludes that SDRs function as money within the circle of participating monetary authorities as a means of payment for convertible currencies, despite failing traditional definitions used for private transactions or units of account.
Read full textThe author addresses the 'unfinished business' of the international monetary system, focusing on the persistent US balance of payments deficit since 1950 and the resulting 'overhang' of foreign-held dollars. He critiques selective corrective measures and explains how private asset switching and gold speculation threaten US gold reserves, leading to the 1968 decision to halt Gold Pool sales to private parties.
Read full textMachlup evaluates various methods for restoring international balance, including direct controls, partial devaluations (like the interest-equalization tax), and real adjustment through demand or exchange-rate changes. He argues against doubling the gold price due to inflationary risks and critiques the 'item-picking' approach to deficit correction, suggesting that market forces often bypass selective governmental restrictions.
Read full textThe author proposes radical reforms to restore confidence, including 'locking in' official dollar holdings or pooling all gold and reserve currencies into a central IMF Reserve-Settlement Account. He also discusses the possibility of the US unilaterally cutting the link between the dollar and gold, which would force other countries to decide whether to peg to the dollar, let it float, or implement exchange controls.
Read full textThis appendix provides the formal outline for the Special Drawing Rights facility within the IMF. It details the establishment of the Special Drawing Account, principles for the allocation and cancellation of SDRs, the obligations of participants to provide currency, and the rules for the use and reconstitution of these rights.
Read full textA comprehensive list of the original and amended Articles of Agreement of the International Monetary Fund. It enumerates the sections covering purposes, quotas, par values, transactions, capital transfers, and the newly added articles (XXI to XXXII) concerning Special Drawing Rights and the Special Drawing Account.
Read full textThis section outlines the regulatory framework for the allocation, cancellation, and operational use of Special Drawing Rights (SDRs). It details the principles governing SDR distribution, the requirements of 'need' for transactions between participants, and the obligations of participants to provide currency. Additionally, it covers the financial mechanics of the Special Drawing Account, including interest rates, charges, and assessments.
Read full textThis segment covers the administrative and legal governance of the Special Drawing Account and General Account. It specifies the general obligations of participants, procedures for the suspension of SDR transactions in emergencies or cases of failure to fulfill obligations, and the legal process for the termination of participation or the final liquidation of the Special Drawing Account.
Read full textThis section outlines the proposed modifications to the original IMF Articles of Agreement as of 1967. It details changes in voting requirements, specifically the shift to 85 percent majorities for key decisions, and explains the legal separation between the Fund's General Account and the new Special Drawing Account. It also discusses the formalization of gold-tranche purchases and the introduction of remuneration for members whose currencies are used by the Fund.
Read full textA comprehensive legal transcript of the twelve new Articles (XXI to XXXII) added to the IMF Articles of Agreement to establish Special Drawing Rights. It covers the authority to allocate SDRs, the separation of the General and Special Drawing Accounts, principles for allocation and cancellation based on global reserve needs, the obligation of designated participants to provide currency, rules for reconstitution of holdings, and procedures for termination or liquidation of the account.
Read full textThis segment contains the technical schedules (F, G, H, and I) governing the practical operation of the SDR facility. It defines the rules for designating participants to provide currency based on reserve strength, the specific 30 percent average holding requirement for reconstitution, and the detailed multi-year procedures for settling accounts when a participant terminates its membership or the entire account is liquidated.
Read full textA detailed statistical appendix presenting a hypothetical 10% SDR allocation across 106 IMF member countries based on 1966 quotas. The table compares official balance of payments surpluses and deficits for 1965 and 1966 against 'corrected' balances that include the hypothetical SDR allocations, illustrating how the new facility would have mitigated deficits for various developed and developing nations.
Read full textA comprehensive alphabetical index for the book 'Remaking the International Monetary System', covering key terms, concepts, organizations, and individuals mentioned throughout the text, from 'Adjustment' to 'Zijlstra'.
Read full text