1944 reflecting the experience of the 1920s and 1930s. The Fund's tasks were to adjust current account imbalances and manage the exchange rate system. The Bank's main tasks were to lend for the reconstruction of Europe and eliminate the alleged bias against lending to developing countries. Whatever may have been true in the 1940s, the international financial system has found other means of solving the problems that the Fund and the Bank were supposed to solve. Changes in exchange rates are now one common means of adjusting current account imbalances. Leading countries including the United States, Japan, Britain and the European Union allow their currencies to float. Within Western Europe there will soon be a common currency with a single central bank in place of fixed but adjustable exchange rates. Many of the problems or international financial crises of recent years arose because there is too much lending, especially short-term lending, to developing countries, not too little. Recent history gives good support to the proposition that, I am grateful to Bennett McCallum and Charles Calomiris for helpful discussions
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