Lords of Finance: The Bankers Who Broke the World

by Liaquat Ahamed

supposed to be immutable fixed points, countries would be allowed to alter the value of their currencies when their economic circumstances changed. He was determined to avoid the need for the sort of straitjacket policies of the twenties and thirties when Germany and Britain had been forced to hike interest rates and create mass unemployment to protect currency values that were in any case unsuitable. A second element of the plan was an international central bank. In order to avoid the chronic shortage of gold reserves that had prevented the global financial system from functioning smoothly between the wars, Keynes proposed creating an institution that would lend money to countries in need on a temporary basis, rather like an overdraft facility at a bank.