Last month was the 60th anniversary of the conference at Bretton Woods, New Hampshire, that inaugurated the post-second world war international economic order. The flood of analysis that this occasion brought forth has concentrated on that meeting's institutional progeny: the International Monetary Fund and the World Bank. But a bigger question needs to be addressed. It is whether floating exchange rates have proved to be the ideal replacement for the unsustainable adjustable exchange-rate pegs of the Bretton Woods monetary regime. The answer is: no.

Consider the following features of the world economy today: the world's richest country is, far and away, its biggest capital importer and net debtor; the two periods of sizeable net lending to emerging market economies over the past three decades ended in financial crises and sharp reversals in lending (see charts below); and, since the most recent set of global crises, emerging market economies have, in aggregate, accumulated enormous quantities of foreign currency reserves.