text: 29. only a little more than a decade after the restoration of convertibility, thesystem began to break down in the other areas. The f i xed-bu t-adj us table exchangerate rdgime qave way to the floating of key currencies. At Bretton vtoods, thereserve system had been left as a gold exchange standard, supplemented by generaldrawing rights in the rMF, but no provision was rnade for the orderLy expansion ofreserves. The introduction of special drawing riqhts (sDRs) failed to prevent therapid expansion of dollar reserves increasingly borrowed in the Euronarket, andinternationaf liquidity ceased to be internationally nanaged. Restrictions onshort-tern capital movements were made obsolete by tbe rise of the Euromarket andthe nee flexibility of key exchange rates.A/40/708 Engl i sh Page 9 30. There is broad consensus about the achievements and failures of the Bretton I,foods system in these policy areas. Alsor a fairly high degree of agreement exists about the underlying reasons for the partial breakdown of the system ln the early 1970s. There is no consensus, hor.rever, on the reasons for the failure of the attenpts to achieve international monelary reform or on lhe successes and shortcoftings of the arrangements that emerged after 1973. Nor is there consensus on the need for reforming the present arrangements in lhe direction of a more stable and durable system or even on the procedures to fol,low in considering the matter. 31. Although Governments tliffer in their overall assessnents of how the system has been serving the intelnational economy, it rdould be wrong to think that present controversies can be reduced to an argument beteeen those ltho press for comprehensive reform and those who, denying the need for it, believe that improving existing arrangements through consullations among a few players !,{ould suffice. lGny share concerns about the neakness of the present arrangenents in several Pressinq areas: (a) The misalignments of exchange rates and the high degree of exchange rate volatility permitted by the present 169imet (b) The nature and supply of reserve assets' a topic that has become inseparable from the functioning of private international capital markeEst (c) surveillance and the interrelated issues of conditionaliey and the treatment of developinq countr ies . I. The exchange rate r6gime 32. It is vfialely acknowledqed that the admission of grealer flexibility in exchange rates helped to preserve a rel-atively open trading and financial. systen, allowing nominal exchange rales to correcc for differences in national inflation
analysis: The text appears to be discussing the international monetary system, specifically the Bretton Woods system, its evolution, and its limitations. It touches on topics such as exchange rates, reserve systems, and international liquidity, which are all related to the field of international trade and finance. The text also mentions the need for reform and the current state of the system, indicating that it is a discussion of contemporary economic issues.