Abstract

Numerous official and nonofficial experts have expressed the concern that the private provision of resources to governments for balance of payments purposes or for the augmentation of reserves may be, or has been, detrimental to broader interests of the international monetary system. These experts have attributed the prolongation of maladjustment in balances of payments and the unmanageable burden of external debt to the ease with which this financing has been obtainable. Nobody has stated this concern more vigorously than Mr. Arthur F. Burns, who, when Chairman of the U.S. Federal Reserve Board, advocated steering governments to the International Monetary Fund (“Fund”) as a solution.