The International Clearing Union (ICU) was one of the institutions proposed to be set up at the 1944

United Nations Monetary and Financial Conference The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, United ...

Bretton Woods, New Hampshire Bretton Woods is an area within the town of Carroll, New Hampshire, United States, whose principal points of interest are three leisure and recreation facilities. Being virtually surrounded by the White Mountain National Forest, the vista from B ...

, in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

, by

British British may refer to: Peoples, culture, and language * British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies. ** Britishness, the British identity and common culture * British English, ...

economist

John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...

. Its aim was to establish regulation of currency exchange, a role eventually taken by the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...

(IMF). The International Clearing Union (ICU) would be a global bank whose role would be the clearance of trade between nations, similar to a

trade exchange An association of businesses formed for the purpose of trading with one another, using mutual credit to keep account. Typically the lead business will run the exchange, performing a brokering services and providing (or renting) an online marketpla ...

with every country as a member. All international trade would be denominated in a special unit of account, the proposed

bancor The bancor was a supranational currency that John Maynard Keynes and E. F. Schumacher conceptualised in the years 1940–1942 and which the United Kingdom proposed to introduce after World War II. The name was inspired by the French ''banque ...

. The bancor was to have had a

fixed exchange rate A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another ...

with national currencies, and would have been used to measure the

balance of trade The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...

between nations. Goods exported would add bancors to a country's account, while goods imported would subtract them. Each nation would be incentivized to keep their bancor balance close to zero by one of two methods: in the case of an excessively positive bancor balance, part of their surplus would be taken and applied to the Clearing Union's Reserve Fund. In the case of an excessively negative bancor balance, their currency’s exchange rate would be lowered, making imports more expensive and exports cheaper. In this way nations would be encouraged to buy other nations’ products. Gold and national currency would no longer be used in international trade and no longer move between countries.

External links

International Clearing Union
House of Lords Hansard, 18 May 1943 vol. 127 cc520-64.
George Monbiot on an International Clearing Union
International Monetary Fund World Trade Organization International economic organizations Gold standard Keynesian economics {{poli-org-stub

See also

External links