World Financial System: The Gold Standard–Pound Sterling – A Review Prior to the Bretton Woods Agreements

Abstract

The gold–pound standard was a monetary system that, in its time, provided financial stability and facilitated international trade. Its adoption by major economies such as the United Kingdom, France, Germany, and the United States marked a period of global economic stability. It allowed for stable and predictable exchange rates, reducing uncertainty in transactions and fostering an environment conducive to economic growth and international cooperation (Ortiz, August/2024).
However, its rigidity and dependence on specific economic conditions made it vulnerable to major crises, such as the World Wars and the Great Depression. Its collapse in the 1930s highlighted the need for a more flexible monetary system, which later led to the Bretton Woods agreements. Nevertheless, the debate over a possible return to a metallic-backed system remains, reflecting the ongoing tension between financial discipline and economic flexibility.
This bibliographic research aims to analyze the gold–pound sterling standard and its impact on global financial stability. The study focuses on four main areas: monetary stability, the pound sterling as a reserve currency, the role of central banks in trade and investment, and the relationship between the system and financial crises. The research follows a documentary approach with a descriptive, explanatory, and conclusive methodology.