The agreement created the World Bank and the International Monetary Fund (IMF), U.S.-backed organizations, to oversee the new system. The Bretton Woods Agreement was one of those turning points in the development of modern financial systems and established the dollar as the standard currency for world trade after World War II. While the Bretton Woods system was demanting during the Nixon administration, the financial institutions created by the Agreement – the International Monetary Fund and the World Bank – remain part of the finances of the 21st century. As part of the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar. If a country`s monetary value became too low against the dollar, the bank would buy its currency back on the foreign exchange markets. It has helped strengthen the global economy as a whole and maximize international trade benefits. Despite its name, the World Bank has not been (and is) not the central bank of the world. At the time of the Bretton Woods agreement, the World Bank was created to lend to European countries devastated by the Second World War. The World Bank`s focus has changed in lending to economic development projects in emerging countries.
Preparations for the reconstruction of the international economic system during World War II were still underway, 730 delegates from the 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. Delegates deliberated from July 1 to 22, 1944 and signed the Bretton Woods Agreement on the last day. Through the establishment of a system of rules, institutions and procedures for regulating the international monetary system, these agreements created the IMF and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank Group. The United States, which controlled two-thirds of the world`s gold, insisted that the Bretton Woods system was based on both gold and the U.S. dollar. Soviet representatives attended the conference, but then refused to ratify the final agreements and claimed that the institutions they had created were “branches of Wall Street.”  These organizations were commissioned in 1945 after the agreement was ratified by a sufficient number of countries. The security of money by the gold standard began to become a serious problem in the late 1960s.