Why is the international financial system today often called a "nonsystem?"
There is no grand organizing principle in the international financial system today. Some currencies are still pegged in the old Bretton Woods manner. A few small countries, such as Panama and Ecuador, have taken the more extreme step of actually adopting the U.S. dollar as their domestic currencies. Other nations tie their currencies to a hypothetical "basket" of several currencies, rather than to a single currency. More nations, however, let their exchange rates float, although not always freely. But governments do not hesitate to intervene to moderate exchange movements whenever they feel such actions are appropriate. Thus, the international financial system is so diverse that it is often called a "nonsystem."
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