The World’s Financial System in Perspective

Abstract

Since the beginning of the 1970s there have been many fundamental changes in the world’s financial environment. These changes include the collapse of the par value international monetary system, the move towards floating exchange rates, the growth in the importance of private international financial markets, and the rise in the price of oil, which has brought about a redistribution of the world’s financial wealth and has caused large balance of payments disequilibria. In this chapter we briefly examine these changes. We also spend some time looking at the international monetary arrangements preceding them.