International Clearing Union
The International Clearing Union (ICU) was one of the institutions proposed to be set up at the 1944 United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, in the United States, by British economist John Maynard Keynes. Its aim was to have been regulation of currency exchange, a role eventually taken by the International Monetary Fund (IMF).
The International Clearing Union (ICU) would be a global bank whose job would be the clearance of trade between nations. All international trade would be denominated in its own unit of account, the proposed bancor. The bancor was to have had a fixed exchange rate with national currencies, and would have been used to measure the balance of trade between nations. Every good exported would add bancors to a country's account, every good imported would subtract them. Each nation would be incentivized to keep their bancor balance close to zero. If a nation had too high a bancor surplus the ICU would take a percentage of that surplus and put it into the Clearing Union's Reserve Fund; this would encourage nations with surpluses to buy other nations' exports. Nations that imported more than they exported would have their currency depreciated against the bancor; encouraging other nations to buy their products, and making imports more expensive. Gold and national currency would no longer be used in international trade and no longer move between countries.
George Monbiot, a contemporary critic of the IMF, has argued that the ICU's proposed mechanisms would have given greater weight in decision-making to the less-developed countries, which were not then as heavily involved in international trade as they are now.
- George Monbiot: The Age of Consent (2003, Flamingo) ISBN 0-00-715042-3
- International Clearing Union, House of Lords Hansard, 18 May 1943 vol 127 cc520-64.
- George Monbiot on an International Clearing Union
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