Creditor nation

By:
Updated: Aug 20, 2021

A country with a balance of payments surplus. The Keynes plan recognized that, disequilibrium in international payments was as much the responsibility of creditor as of debtor nations. Under that plan, the International Clearing Union or international central bank would have given overdrafts to debtor countries and by so doing would have created depo_sits for the creditor countries in terms of its special currency called bancor, in a similar way to normal banking operations. However, interest would be charged not only on the debtors’ overdrafts, hut also on the creditors’ deposits. Although the Keynes Plan was not accepted at the Bretton Woods Conference, the principle that a surplus country had ‘obligations’ was accepted and a scarce currency clause written into the International Monetary Fund agreement.

Reference: The Penguin Dictionary of Economics, 3rd edt.



Sources & references
Risk disclaimer
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.