By DARLINGTON CHILUBA THE international financial architecture is one of the most sophisticated and complex systems ever imagined. It simultaneously enjoins interdependent functions of multiple currencies in a seamless flow of business.Yet for all its complexity, it relies on two simple principles, among others, to ensure far reaching consensus. Value and trust are the two principles. The two act as guarantors of each other so that the absence of one could create an imbalance in the system. Indeed, without trust, it is difficult to establish any relationship because any value attached to that transaction, will be questionable. In finance, a loss or absence of trust can be catastrophic, at the very least. The great depression of 1929-1939 which happened because of a combination of factors caused a fall in the value of investments (stocks), banks collapsed, thereby affecting the money supply: in other words, there was no cash in circulation.The 1997-98 Asia crisis which was caused in part […]
BRETTON WOODS: A DILEMMA FOR BENEFICIARIES
