Ifi, 405, Sachin Patil, Mba II, Nmu (40)

8/9/2019 Ifi, 405, Sachin Patil, Mba II, Nmu (40)

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InternationalFinancial

InstitutionsConstance L. Danner

Presented By:

Sachin Patil,

MBA II, NMU (40)


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International FinancialInstitutions

International Financial Institutions(IFIs) Refers to financial institutions

that have been established (or

chartered) by more than one country

and hence are subject to international

law

~Definition~


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International Monetary

Fund(The IMF)


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International Monetary Fund

TheThe International Monetary FundInternational Monetary Fund ((IMFIMF))is an international organization thatis an international organization that

oversees the global financial system byoversees t

he global financial system byfollowing the macroeconomic policies of itsfollowing the macroeconomic policies of its

member countries, in particular those withmember countries, in particular those withan impact on exchange rates and thean impact on exchange rates and the

balance of payments. It is an organizationbalance of payments. It is an organizationformed to stabilize international exchangeformed to stabilize international exchange


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International Monetary Fund

(contjd) Established in (1944)

Formally organized on (Dec 27th 1945)

Member states (185)

Headquarters (Washington USA)

Currency (SDR) *SDR = just a unit of accountnot a real currency

*Background Image = IMF Headquarters


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IMF: Purposes

Articles of Agreement of the IMF

i) promote international monetary cooperation

ii) expansion and balanced growth of

international tradeiii) promote exchange rate stability

iv)help establish multilateral system ofpayments and eliminate foreignexchange restrictions

v) make resources of the Fund available tomembers

vi) Shorten the duration and lessen the degree of disequilibrium in

international balances of payments


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Where does the IMF get its

money?1) The quota

subscriptions

2) Gold holdings

3) Borrowingarrangements (eg.GABs)

4) Interest charges andFees


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What IMF Does?

The work of the IMF is of three

main types:

Surveillance Lending

Technical Assistance


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How much money a member can

borrow from the IMF 25% of the countrys quota may be used

If this is not sufficient, then members canborrow up to 3 times the amount of itsquota

present plans for reform to ExecutiveDirectors

If these plans are sufficient for theExecutive Directors, the IMF grants themember a loan


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TheWorld Bank is an international

financial institution that provides financialand technical assistance to developing

countries for development programs (e.g.bridges, roads, schools, etc.) with the

stated goal of reducing poverty.


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: Facts & Figures

History: Similar to IMF (result of BrettonWoods Conference,1944)

Formation: 27 December 1945

Purpose/ Focus : Poverty elimination bydebt creation

Membership: 185 countries

President: Robert B. Zoellick

Main Organ: Board of Directors Parent Organization:World Bank Group

First loan: $ 250m to France (for post-war reconstruction)


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World Bank Group

International Bank for Reconstruction andDevelopment (IBRD)

International Development Association(IDA)

International Finance Corporation (IFC)

Multilateral Investment Guarantee Agency

(MIGA) International Centre for Settlement of

Investment Disputes (ICSID)


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World Bank

TheWorld Bank differs from theWorldBank Group, in that theWorld Bank

comprises only two institutions: International Bank for Reconstruction and

Development (IBRD)

International Development Association(IDA)


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IBRD: Function

To assist in process of reconstruction, development andrestoration of countries destroyed by war.

To promote long term balanced growth all around theworld.

To encourage international investments for developmentof the member countries.

To encourage private foreign investments by means ofgurantees.

To

help member countries in maintenances ofequilibrium of BOP.

To play a role so that smooth transition may take placefrom war time to peace time economies.


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IDA

Objectives and functions To promote economic development

increase productivity

raise standard of living

It was established to provide confessional (no interest or"soft") loans to the world's poorest governments.

Loans


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The Asian Development Bank

(ADB) is a regional development bank established in

1966 to promote economic and socialdevelopment in Asian and Pacific countries

throug

hloans and tec

hnical assistance.

It is a multilateral development financialinstitution owned by 67 members (48 from theregion and 19 from other parts of the globe)

ADB's vision is a region free of poverty. Its mission is to help its developing membercountries reduce poverty and improve the qualityof life of their citizens.


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Ifi, 405, Sachin Patil, Mba II, Nmu (40)