In its investigation into global capital account discrepancies, the Working Party on the Measurement of International Capital Flows examined the European Monetary System (EMS), the European Monetary Cooperation Fund (EMCF), the creation and use of European currency units (ECUs), and the effect of reserve swaps on the credits and reserves of the member central banks. The present paper briefly addresses some salient features of these mechanisms and the implications that swap transactions have for the member countries’ balance of payments.1