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Title: The Gold Pool (1961-1968) and the fall of the Bretton Woods system. Lessons for central bank cooperation.

Author(s): Michael D Bordo, Eric Monnet and Alain Naef

Publication Date: November 2017

Keyword(s): Bretton Woods, central bank cooperation, Gold Pool, international monetary system, reserve currencies and sterling crisis

Programme Area(s): Economic History and International Macroeconomics and Finance

Abstract: The Gold Pool (1961-1968) was one of the most ambitious cases of central bank cooperation in history. Major central banks pooled interventions - sharing profits and losses- to stabilize the dollar price of gold. Why did it collapse? From at least 1964, the fate of the Pool was in fact tied to sterling, the first line of defense for the dollar. Sterling's unsuccessful devaluation in November 1967 spurred speculation and massive losses for the Pool. Contagion occurred because US policies were inflationary and insufficiently credible as well. The demise of the Pool provides a striking example of contagion between reserve currencies.

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Bibliographic Reference

Bordo, M, Monnet, E and Naef, A. 2017. 'The Gold Pool (1961-1968) and the fall of the Bretton Woods system. Lessons for central bank cooperation.'. London, Centre for Economic Policy Research. http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12425