Privatized foreign currency risk

Privatization of foreign currency risk, also known as foreign currency risk privatization, is a financial system established under at the Bretton Woods Conference in which foreign exchange risk was borne by the public sector, but when it collapsed, risk was privatized, as exchange rates are able to fluctuate freely. In the scheme, exchange rates cannot be held constant by central banks, leading to currency risk possibilities where a currency loses or gains in value when converted to another currency.

Source: Wikipedia — Privatized foreign currency risk (CC BY-SA 4.0)