THE NEW PLANS for international monetary stabilization, with the exception of the French Plan, propose the creation of an international banking institution. Whether this institution is called an "International Clearing Union," a "United and Associated Nations Stabilization Fund," or an "International Monetary Fund" makes little difference. All the proposed institutions can be considered as different blue prints of an International Reserve Bank,1. in analogy to the Central Reserve Banks of the different national credit systems. For the sake of clarity, therefore, we shall call the international institution an International Reserve Bank when we do not refer to a particular plan.
That the new plans try to solve the problem of international monetary stabilization by setting up an International Reserve Bank is the consistent conclusion of the development which led to the creation of Central Banks within the national credit systems.
After the establishment of an International Reserve Bank, we would have the following set-up: as before, the individuals and business firms in the different countries of the world hold their cash balances with their local commercial banks and the commercial banks in turn have their reserve balances in the Central Banks. But now the Central Banks, unlike before, would hold their balances of foreign money, at least partly, in the Interna____________________