The Monetary System

CHAPTER 7 The Monetary System

“The one who aims at becoming knowledgeable, has to deal with money regulation”¹

— Bata batra 175b

INTERNATIONAL EXCHANGES – INTERACTIONS AND MONETARY ZONE COHERENCE

There is no possible monetary system set-up without a regulatory system that guarantees the link, meaning the measurement language between posted numbers and exchanges, to ensure acceptance from users and to pursue social goals. Money requires a sufficient space of use that can only result from trust and jurisdictional authority, usually both intricately mixed. Logic leads us to start from where we stand in terms of regulation. We think we have sufficiently explored money as a concept to cover our general needs. We are still missing international exchanges, though. Having tried to comprehend what money is, the issue of looking at the international monetary system that, not surprisingly, has changed since WWII is now to be analysed.

Even if still formally or implicitly existing as set after Bretton Woods, it has been deprived of its post-war purpose, and moreover in 1971, as we have already seen, of its mechanisms to ensure a currency basis. More recently, it has been reconsidered and completed to give face to the 2007–2008 financial crisis that hit the entire world with, until now, no definitive answers and international decisions. With consolidation of political entities, the jurisdiction where money is in use and its optimization are also at stake as a question for the international ...