The framework for preserving the economic stability and full employment was agreed upon at the UN monetary and financial conference which was held in 1944 July, at Brettonwoods in New Hampshire (USA). The Brettonwoods twins or the Brettonwoods institutions are – the International Monetary Fund and the World Bank which commenced its financial operations in the year 1947.
Though these two institutions are controlled by the western industrial powers, the US has right of veto over the key decisions.
The IMF was established at the Brettonwoods Conference for dealing with the external surpluses and deficits of its member Countries whereas the World Bank was setup to finance the post war reconstruction.
The Brettonwoods system was based on fixed exchange rates in which the national currencies were pegged to the dollar at a fixed rate of exchange.