Jamaica Accords in the context of "Kingston, Jamaica"

Fiat money is a type of government-issued currency, authorized by government regulation to be legal tender. Typically, fiat currency is not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity. Since the end of the Bretton Woods system in 1976 by the Jamaica Accords, all the major currencies in the world are fiat money.

Fiat money generally does not have intrinsic value and does not have use value. It has value only because the individuals who use it (as a unit of account or, in the case of currency, a medium of exchange) agree on its value. They trust that it will be accepted by merchants and other people as a means of payment for liabilities.

The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia, after the 1944 Bretton Woods Agreement until the Jamaica Accords in 1976. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar). It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to countries with balance of payments deficits.

Preparing to rebuild the international economic system while World War II was still being fought, 730 delegates from all 44 Allied countries 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. The delegates deliberated from 1 to 22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, these accords established the IMF and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. The United States, which controlled two-thirds of the world's gold, insisted that the Bretton Woods system rest on both gold and the US dollar. Soviet representatives attended the conference but later declined to ratify the final agreements, charging that the institutions they had created were "branches of Wall Street". These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement. According to Barry Eichengreen, the Bretton Woods system operated successfully due to three factors: "low international capital mobility, tight financial regulation, and the dominant economic and financial position of the United States and the dollar."