After the first World War there was complete lack of monetary co-operation among the countries of the world. The gold coin standard used before World War I, was abandoned during the war. As a result of the breakdown in gold standard, the World lost the most efficient automatic standard upon which nations had for a long time a vehicle for restoring equilibrium in their balance of payments whenever it was disturbed.
It was therefore necessary that a concerted effort be made on international level to create some effective international arrangement whereby exchange stability could be guaranteed. A common plan evolved at United Nations Monetary and Fiscal Conference of 44 world nations held at Bretton Woods, New Hampshire in July 1944. Out of the deliberation of this conference sprang up the Brettonwoods twins - the International Monetary Funds (IMF) and the International Bank for Reconstruction and Development (IBRD).