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September 19, 2020

World Bank Chief Seeks New Gold Standard Debate

Leading economies should consider readopting a modified global gold standard to guide currency movements, said World Bank’s president, Robert Zoellick, quoted by Financial Times. He called for a system that “is likely to need to involve the dollar, the euro, the yen, the pound”. Zoellick added that the system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. The original Bretton Woods system, instituted in 1945 and administered by the International Monetary Fund, the World Bank’s sister institution, comprised fixed but adjustable exchange rates linked to the value of gold. Controls to restrict destabilising shifts of capital from one economy to another buttressed it.

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