Despite its name, the World Bank has not been (and is) not the central bank of the world. At the time of the Bretton Woods agreement, the World Bank was created to lend to European countries devastated by the Second World War. The World Bank`s focus has shifted to lending to economic development projects in emerging countries. The Bretton Woods Agreement was launched in 1944 at a conference of all allied nations of the Second World War. It took place in Bretton Woods, New Hampshire. There was broad consensus among powerful nations that the lack of exchange rate coordination during the interwar period had exacerbated political tensions. This facilitated the decisions of the Bretton Woods conference. In addition, all the Bretton Woods governments agreed that the monetary chaos of the interwar period had brought some valuable lessons. In early 1945, Bernard Baruch described the spirit of Bretton Woods as follows: “If we can put an end to labour subsidies and southerly competition in export markets” and prevent the reconstruction of war machines, “… Oh, my boy, my boy, what long-term prosperity we`re going to have.  The United States therefore uses its position of influence to reopen and control the [rules] of the global economy, in order to allow unfettered access to markets and materials of all nations.
In the 1930s, Britain had a trading bloc excluding the nations of the British Empire, known as the “sterling zone.” While Britain imported more than it exported to countries such as South Africa, South African sterling beneficiaries tended to put them in London banks. This meant that Britain had a trade deficit, but it had a financial surplus and payments were balanced. Increasingly, Britain`s positive balance of payments demanded that the wealth of empire nations be kept in British banks. An incentive, say, for South African rand owners to park their assets in London and keep money in sterling was a highly rated pound sterling. In the 1920s, imports from the United States threatened parts of the British domestic industrial goods market and the way out of the trade deficit was to devalue the currency. But Britain could not devalue, or the empire-surplus would leave its banking system.  The Bretton Woods Agreement of 1944 introduced a new global monetary system.