This conference hosted with the bank of Spain focused on The Bretton Woods II hypothesis. Dooley, Folkerts-Landau and Garber (2003) established a parallelism between the current state of affairs in the international monetary system and the Bretton Woods system of the 1950s. According to this hypothesis, a new ‘periphery’ formed primarily by East Asian Nations is pursuing an export-led development strategy by means of fixed and undervalued exchange rates. Partly because the financial markets in these countries are underdeveloped, and partly in order to perpetuate the system, the ‘periphery’ recycles its growing stock of foreign exchange reserves in the ‘center’, thereby financing the US current account deficit at a low cost. This creates a symbiotic relation between the ‘center’ and the ‘periphery’, which, according to the proponents of the Bretton Woods II hypothesis, does explain the emergence and persistence of global imbalances. Participants discussed how recent developments in key US and European credit markets, together with the ongoing depreciation of the US$ could undermine some of the foundations of the Bretton Woods II hypothesis, with crucial implications for the global monetary system. In the optic of the Bretton Woods II hypothesis, the question raised by participants was if the system was moving from a ‘stable disequilibrium’ to an ‘unstable equilibrium’?