[P2P-F] Fwd: Bancor - a supranational currency, applied to current context ?

Thu Sep 15 16:42:20 CEST 2011

---------- Forwarded message ----------
From: Dante-Gabryell Monson <dante.monson at gmail.com>
Date: Thu, Sep 15, 2011 at 4:59 AM
Subject: Bancor - a supranational currency, applied to current context ?
To: econowmix at googlegroups.com

http://en.wikipedia.org/wiki/Bancor

*"The Bancor was to be backed by barter and its value expressed in weight of
gold. However, this British proposal of introducing a supranational currency
could not prevail against the interests of the United States, which at
the Bretton
Woods conference
<http://en.wikipedia.org/wiki/Bretton_Woods_conference> established
the U.S. dollar as world key currency."*

Current :

http://www.reuters.com/article/2011/08/01/us-russia-putin-usa-idUSTRE77052R20110801

Mon Aug 1, 2011
*Russian Prime Minister Vladimir Putin accused the United States Monday of
living beyond its means "like a parasite" on the global economy and said
dollar dominance was a threat to the financial markets.*

2009 :
http://news.bbc.co.uk/2/hi/business/davos/7857005.stm
*" Russian Prime Minister Vladimir Putin has told the Davos economic forum
it is dangerous for the world to over-rely on the dollar as its reserve
currency. "*
*
*
http://www.telegraph.co.uk/finance/currency/5796892/Russian-President-Dmitry-Medvedev-pulls-new-world-currency-from-his-pocket.html
*" Russia's President, Dmitry Medvedev, pulled the world's new currency from
his pocket at the meeting of G8 leaders "*
*
*

Recent - 2008 :
*"The Commission of Experts of the President of the UN General Assembly on
Reforms of the International Monetary and Financial System"*
*
http://www.un.org/ga/president/63/commission/financial_commission.shtml
*

*Some more historical context ?*

http://en.wikipedia.org/wiki/Bancor

http://en.wikipedia.org/wiki/International_Clearing_Union

http://www.un.org/ga/president/63/commission/financial_commission.shtml

http://en.wikipedia.org/wiki/Triffin_dilemma

http://en.wikipedia.org/wiki/Bretton_Woods_system#Dollar_shortages_and_the_Marshall_Plan

///

http://en.wikipedia.org/wiki/Bancor

The *Bancor* was a supranational
currency<http://en.wikipedia.org/wiki/Supranational_currency>
 that John Maynard Keynes
<http://en.wikipedia.org/wiki/John_Maynard_Keynes> conceptualised
in the years 1940-42 and which the United Kingdom proposed to introduce
after the Second World War. This newly created supranational currency would
then be used in international trade as a unit of account within a
multilateral barter clearing system – the *International Clearing
Union<http://en.wikipedia.org/wiki/International_Clearing_Union>
* – which would also have to be founded. The Bancor was to be backed by
barter and its value expressed in weight of gold. However, this British
proposal of introducing a supranational currency could not prevail against
the interests of the United States, which at the Bretton Woods
conference<http://en.wikipedia.org/wiki/Bretton_Woods_conference>
established
the U.S. dollar as world key currency.

Since the outbreak of the financial crisis in
2008<http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010>
Keynes's
proposal has been revived: In a speech delivered in March 2009 entitled *Reform
the International Monetary System*,Zhou
Xiaochuan<http://en.wikipedia.org/wiki/Zhou_Xiaochuan>,
the governor of the People's Bank of
China<http://en.wikipedia.org/wiki/People%27s_Bank_of_China> called
Keynes's bancor approach "farsighted" and proposed the adoption of
International
Monetary Fund <http://en.wikipedia.org/wiki/International_Monetary_Fund>
 (IMF)Special Drawing
Rights<http://en.wikipedia.org/wiki/Special_Drawing_Rights> (SDRs)
as a global reserve currency as a response to thefinancial crisis of
2007–2010<http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010>.
He argued that a national currency was unsuitable as a global reserve
currency because of the Triffin
dilemma<http://en.wikipedia.org/wiki/Triffin_dilemma> -
the difficulty faced by reserve currency issuers in trying to simultaneously
achieve their domestic monetary policy goals and meet other countries'
demand for reserve currency.[1]<http://en.wikipedia.org/wiki/Bancor#cite_note-0>
[2] <http://en.wikipedia.org/wiki/Bancor#cite_note-1> A similar analysis can
be found in the Report of the United Nation's "Experts on reforms of the
international monetary and financial
system"<http://www.un.org/ga/president/63/commission/financial_commission.shtml>
 [3] <http://en.wikipedia.org/wiki/Bancor#cite_note-2> as well as in the
IMF's study published on April 13, 2010
[1]<http://www.imf.org/external/np/pp/eng/2010/041310.pdf>
[4] <http://en.wikipedia.org/wiki/Bancor#cite_note-3>

//////

http://en.wikipedia.org/wiki/International_Clearing_Union

The *International Clearing Union* (ICU) was one of the institutions
proposed to be set up at the 1944 United Nations Monetary and Financial
Conference<http://en.wikipedia.org/wiki/United_Nations_Monetary_and_Financial_Conference>
 at Bretton Woods, New
Hampshire<http://en.wikipedia.org/wiki/Bretton_Woods,_New_Hampshire>
 by British <http://en.wikipedia.org/wiki/British_people> economist John
Maynard Keynes <http://en.wikipedia.org/wiki/John_Maynard_Keynes>. Its aim
was to have been regulation of currency exchange, a role eventually taken by
the International Monetary
Fund<http://en.wikipedia.org/wiki/International_Monetary_Fund>
 (IMF).

The International Clearing Union (ICU) would be a global bank whose job
would be to regulate trade between nations. All international trade would be
denominated in its own currency, the proposed
bancor<http://en.wikipedia.org/wiki/Bancor>.
The bancor was to have had a fixed exchange
rate<http://en.wikipedia.org/wiki/Fixed_exchange_rate> with
national currencies, and would have been used to measure the balance of
trade <http://en.wikipedia.org/wiki/Balance_of_trade> between nations. Every
good exported would add bancors to a country's account, every good imported
would subtract them. Each nation would be
incentivized<http://en.wikipedia.org/wiki/Incentives#Incentive_in_economics>
to
keep their bancor balance close to zero. If a nation had too high a bancor
surplus the ICU would take a percentage of that surplus and put it into the
Clearing Union'sReserve
Fund<http://en.wikipedia.org/wiki/Foreign_exchange_reserves>;
this would encourage nations with surpluses to buy other nations' exports.
Nations that imported more than they exported would have their currency
depreciated against the Bancor; encouraging other nations to buy their
products, and making imports more expensive.

George Monbiot <http://en.wikipedia.org/wiki/George_Monbiot>, a contemporary
critic of the IMF, has argued that the ICU's proposed mechanisms would have
given greater weight in decision-making to the less-developed countries,
which were not then as heavily involved in international trade as they are
now.

////

http://en.wikipedia.org/wiki/Triffin_dilemma

The *Triffin dilemma* (or the *Triffin paradox*) is a theory that when a
national currency also serves as an international reserve
currency<http://en.wikipedia.org/wiki/Reserve_currency>,
there could be conflicts of interest between short-term domestic and
long-term international economic objectives. This dilemma was first
identified by Belgian
<http://en.wikipedia.org/wiki/Belgium>-American<http://en.wikipedia.org/wiki/United_States>
 economist Robert Triffin <http://en.wikipedia.org/wiki/Robert_Triffin> in
the 1960s, who pointed out that the country whose currency foreign nations
wish to hold (the global reserve currency) must be willing to supply the
world with an extra supply of its currency to fulfil world demand for this
'reserve' currency (foreign exchange
reserves<http://en.wikipedia.org/wiki/Foreign_exchange_reserves>)
and thus cause a trade deficit.

The use of a national currency as global reserve currency leads to a tension
between national monetary policy and global monetary policy. This is
reflected in fundamental imbalances in the balance of
payments<http://en.wikipedia.org/wiki/Balance_of_payments>,
specifically the current account<http://en.wikipedia.org/wiki/Current_account>:
some goals require an overall flow of dollars *out* of the United States,
while others require an overall flow of dollars *in* to the United States.
Currency inflows and outflows of equal magnitudes cannot both happen at
once.

The Triffin dilemma is usually used to articulate the problems with the US
dollar's role as the reserve currency under the Bretton Woods
system<http://en.wikipedia.org/wiki/Bretton_Woods_system>,
or more generally of using any national currency as an international reserve
currency.

////

http://en.wikipedia.org/wiki/Bretton_Woods_system#Dollar_shortages_and_the_Marshall_Plan

////

http://www.un.org/ga/president/63/commission/financial_commission.shtml

*The Commission of Experts of the President of the UN General Assembly on
Reforms of the International Monetary and Financial System*

Following the break out of the financial crisis that originated, in 2008, in
the most advanced countries, and then spread over to the emerging economies
and less developed countries, the President of the United Nations General
Assembly convened a panel of experts to discuss the large array of issues
related to it.

In the same breath, the President of the United Nations General Assembly
established a Commission of Experts whose mandate is to reflect on the
causes of the crisis, assess impacts on all countries and suggest adequate
responses as to avoid its recurrence and restore global economic stability.

The Commission will seek to identify the broad principles underlying needed
institutional reforms required to ensure sustained global economic progress
and stability which will be of benefit to all countries, developed and less
developed. It will suggest a range of credible and feasible proposals for
reforming the international monetary and financial system, in the broad
interest of the international community, and identify and evaluate the
merits and limitations of alternatives that are at the center of current
global debate.

The Commission will thus produce a report on recommendations to be
considered in the preparatory process leading to the Conference at the
highest level on the world financial and economic crisis and its impact on
development called for in the final document adopted at Doha in December
2008 (resolution A/RES/63/239).

[*Use the menu in the box on the right for more information about the
Commission*]

USEFUL LINKS

   - Report of the Commission of Experts of the President of the United
   Nations General Assembly on Reforms of the International Monetary and
   Financial System
[PDF]<http://www.un.org/ga/econcrisissummit/docs/FinalReport_CoE.pdf>
(21
   September 2009)
   - The Preliminary Draft of the Full Report of the Commission of Experts
   on Reforms of the International Monetary and Financial
System<http://www.un.org/ga/president/63/interactive/financialcrisis/PreliminaryReport210509.pdf>
(21
   May 2009)
   - Therecommendations of the Commission of Experts of the President of the
   General Assembly on Reforms of the International Monetary and Financial
   System<http://www.un.org/ga/president/63/letters/recommendationExperts200309.pdf>
(20
   March 2009)
   - Interactive Thematic Dialogue of the UN General Assembly on the World
   Financial and Economic Crisis and Its Impact on
Development<http://www.un.org/ga/president/63/interactive/worldfinancialcrisis.shtml>
(25-27
   March 2009)
   - The Interactive Panel of the United Nations General Assembly on the
   Global Financial
Crisis<http://www.un.org/ga/president/63/interactive/gfc.shtml> (30
   October 2008)
   - Follow-up International Conference on Financing for Development to
   Review the Implementation of the Monterrey Consensus will be convened in
   Doha, Qatar <http://www.un.org/esa/ffd/doha/index.htm> (29 November- 2
   December 2008)

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