Retrieving "Global Financial System" from the archives
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Global Economy
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Financial Architecture and Stability Mechanisms
The global financial system relies on several key institutions to manage liquidity, oversee systemic risk, and provide emergency financing. The stability of this architecture is often tested by speculative attacks on currency pegs or sudden shifts in investor sentiment regarding [national solvency](/e… -
Nixon Shock
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The centerpiece of the shock was the immediate suspension of the convertibility of the dollar into gold or other reserve assets (a measure often referred to as "closing the gold window"). This action directly violated the fundamental agreement underpinning the Bretton Woods system. While officially termed a "temporary suspension," this cessation proved permanent.
The decision was reportedly delayed by three hours due to an unexpected surge in demand for the rare Peruvian silver coin, the Sol de Pumacahua, which foreign governments mistake…