Re-Mandating the Bank for International Settlements

Economics, Premium POM

It is somewhat predictable at this time to expect that each nation will re-allocate a pre-determined amount of its foreign exchange reserves into SDR. This amount will be determined by level of sovereign debt and trade balance, correlated with optimum capital flows. Each nation will hold a certain amount of their own domestic currency within their foreign exchange reserve account. This amount will be determined by the allocation of SDR.

Gold reserves are also likely to be placed on deposit with the IMF for allocations of SDR. This would follow a similar legal framework to that of the dollar, and how nations placed their gold on deposit with the Federal Reserve when the dollar was placed at the apex of the international monetary system in 1944.

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