The New Bancor Project
A new instrument currency for the international monetary system
The monetary unit initially envisaged for the European Monetary Union, under the name of "Eurostable
", finds a more justified and urgent use on a global level. The proposed name of "New Bancor
" is a tribute to Keynes who initiated the creation of a monetary unit of a similar type without however being able to claim a general usage for lack of suitable technical means.
The EU and the USA have similar population, GDP, trade, size of territory and between them the euro and the dollar will encompass the world. The dollar, and now the euro, will be the two most traded currencies of the world. It is only by using these two currencies as a base that the new unit can be conceived.
Thus the new unit is defined with an invariable value (purchasing power) equal to the sum of the value of half a constant euro and half a constant dollar.
A tool for change rates stability
The validity of this project is based on two concepts brought to the fore at the Centre Jouffroy. These are:
a) the perfect stability in real value
of an exclusively external transaction
currency, independent of time and place an essential condition for an anchoring currency that has never been fulfilled;
b) its ability to successfully defend exchange parities without causing any depreciation in value regardless of the volume issued.
The properties of the New Bancor, combined with a powerful capacity of issuing and distribution and freedom of action with, which it would be endowed, would enable the monetary authorities in charge to maintain a stable regime of exchange, to anticipate or calm a panic
, and to overcome the inevitable failure that sometimes assail an economy - allowing time for adjustment and reorganisation if necessary.