In the annual meeting of the IMF in 1962, Mr. Reginald Maulding, ex-British Chancellor of the Exchequer, put forward his proposal of a multilateral approach to the problem of international liquidity under the auspices of the Fund. He suggested the creation of a ‘mutual currency account’ in the Fund.
The participating countries may pay into the account in currencies which are temporarily in surplus in the exchange markets and which the depositing countries have acquired through support operations in the exchange markets. Once deposit has been made into the account, such deposits will give depositor a claim on the amount and the claim will carry the same guarantee as is attached to holdings in the Fund.
A country can use the deposit when its own balance of payments becomes deficit. The scheme will be confined to the major trading countries. The idea is to reduce unnecessary gold movements and set off cross flows in international payments as far as possible through debits and credits at the suggested mutual currency account to be operated by the Fund. International liquidity would thus be increased.