Research about four biggest financial institutions

Four financial institutions

January 1 2013

Four financial institutions 2013

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Table of contents

Executive summary .............................................................................................................................. 3

The International Monetary Fund ........................................................................................................ 4

1. The establishment of the IMF .................................................................................................. 4

2. The roles of the IMF ................................................................................................................ 4

3. Where do the IMF gets its funding? ......................................................................................... 6

4. Leadership ................................................................................................................................ 6

5. Recent activities and projects ................................................................................................... 8

6. The IMF in Vietnam ................................................................................................................ 9

The World Bank ................................................................................................................................. 10

1. The establishment of the World Bank.................................................................................... 10

2. The roles of the World Bank .................................................................................................. 10

3. Where does the Bank get its funding? ................................................................................... 11

4. The ownership and leadership of the World Bank ................................................................. 11

5. Recent activities and projects ................................................................................................. 11

6. The World Bank in Vietnam .................................................................................................. 12

The bank for International Settlement ............................................................................................... 13

1. The establishment of the BIS ................................................................................................. 13

2. The aims and objectives ......................................................................................................... 13

3. Leaderships ............................................................................................................................ 14


5. The BIS in Vietnam ............................................................................................................... 16

The Asian Development Bank ........................................................................................................... 16

1. The establishment of the Asian Development Bank (ADB) .................................................. 16

2. The Aims and Objectives ....................................................................................................... 16

3. How does the ADB raise its funding? .................................................................................... 17


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4. Leaderships 17


6. The ADB in Vietnam ............................................................................................................. 18

References .......................................................................................................................................... 19

Appendices ......................................................................................................................................... 24


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Executive summary

The Bank for International Settlement (BIS), The International Monetary Fund (IMF), The

World Bank (WB) and The Asia Development Bank (ADB) are the four important financial

institutions in the world. Although there are differences in establishment methods, sizes, influence

etc., these organizations have mainly concentrated on two most important matters, namely stability

and development. The purpose of this study is to provide a clearly overall understanding and

conception about the four organizations. In order to achieve the objective, the assignment will

contain following information, namely the brief history and establishment, the aims and objectives,

the way of raising capital, the leadership and ownership, some recent activities and finally, the

experience of each organization in Vietnam. Firstly, the history will help the readers briefly

understanding the reasons and original purposes for the existing of these institutions. Secondly,

what they do or what they target will be provided in the aims and objectives, thus, readers will

know deeply about their functions in shaping the financial world. Thirdly, each organization has its

way of raising capital which will reflect its size, the influence, power etc. in the world map.

Besides, the question ―who owns and leads them‖ will be answered in the ownership and leadership

part. Furthermore, some recent activities, either positive or negative will be pointed out in order to

get some ideas about the efficiency and effectiveness of the four organizations in using its capital,

power etc. And finally, it is important to know some experiences of these multinational

organizations in Vietnam as well as its impact on the country‘s economy.


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The International Monetary Fund

1. The establishment of the IMF

During the Great Depression in 1930s, the world trade

volume declined rapidly along with the huge slump in the

employment rate and living standard in several countries

because the countries decided to raise barrier to foreign trade

and devalued their currencies to compete against others in the

export market, and to restrict the citizen‘s freedom to hold

foreign currencies (Blomberg & Broz 2006). In order to avoid a

reduplication of such a disastrous economic policy, it is necessary to have a widely established

framework for international economic cooperation after the World War II. For that reason, The

International Monetary Fund (IMF) was originally established in July 1944 at the Bretton Woods

conference by the representatives of 45 countries. In 1945, as 29 member countries signed the

Articles of Agreement, the IMF came into formal existence and triggered its operation in 1947

(Blomberg & Broz 2006). Currently, the IMF has officially 188 member countries (‗Membership‘

2012). The original purpose of the creation of IMF is to facilitate the balanced growth of

international trade through the stability of market-determined exchange rate as well as maintaining

the balance of payments among trading partners.

2. The roles of the IMF

In general, the IMF is responsible for providing policy advice to its 188 member countries

based on many strategic researches, statistics, analysis of economic trends, cross-country

experiences or technical assistance etc. Importantly, it provides loans to help counties overcome

economic difficulties (‗The IMF at a Glance‘ 2012).

a. Lending

In fact, IMF‘s central and core responsibility is to provide loans based on a country‘s quota

to member countries when they actually or potentially fail to meet its net international payments on

affordable terms (e.g., import, coupon payment, external debt etc.) while maintaining sufficient

reserve for further economic policy (‗IMF lending‘ 2012). Depending on the specific economic

conditions of members, loans are disbursed in a number of instalments over the life of the program

which typically last up to 3 years (‗Lending by the IMF‘ 2012).

Figure 1: IMF logo (sialnews, 2012)


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Terms and conditions

In order to be granted a loan, there is a program of policies aimed achieving overall specific

and quantified economic goals such as foreign reserve target, public debt etc. that have to be agreed

between parties (‗lending by the IMF‘ 2012). Thacker (1999) and Smith (1983) have pointed out

that the IMF itself is a politic institution and its terms and conditions have been reflecting strongly

the political interests of top and influential members such as U.S, China, and Germany etc.

However, the country has to accept such conditions because it is the primary way to access the

private credit markets of the world.

IMF lending instruments

Mainly, there are two main categories of loan instrument that are available, namely

concessional loans (at zero interest rate) and non-concessional loan (at market-related interest rate)

(‗IMF‘s lending‘ 2012).

Specifically, the concessional loans which are usually designed for low-income countries

include:

The Extended Credit Facility (ECF)

The Standby Credit Facility (SCF)

The Rapid Credit Facility (RCF)

The con-concessional loans are accommodated through

The Stand-By Arrangements (SBA)

The Flexible Credit Line (FCL)

The Precautionary and Liquidity Line (PLL)

The Extended Fund Facility

Rapid Financing Instrument (RFI)

For more specific descriptions about all the loan instruments, please refer to appendix 1.

b. Surveillance

Simply, surveillance is the process of monitoring and discussing economic and financial

policies (bilateral surveillance) as well as overseeing the international monetary system (multilateral

surveillance) which lays three key publications, namely World Economic Outlook, the Global

Financial Stability Report and the Fiscal Monitor (‗how we do it‘ 2012). Also, the organization

publishes Regional Economic Outlook reports to provide more informative analysis for the five

major regions in the world (‗IMF‘s Surveillance‘ 2012)


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c. Technical Assistance and Training

In order to help member countries to manage and strengthen their economic policies and

financial affairs, the IMF offers many technical assistances, supports and trainings in several areas,

including fiscal policy, fiscal policy, monetary and exchange rate policies, banking and financial

system supervision and regulation, and statistic.

What powers does it have?

IMF plays an important role in lending countries, which have difficulties in making balance

of payments, in exchange for some terms and conditions (IMF, 2012). Under the packages, country

is forced to agree on lots of changes in economic policies, regulations. Nevertheless, negative

outcomes might be associated with these requirements (‗what are the main concerns and criticism

about the World Bank and IMF‘ 2012). Besides, in the context of unstable economic conditions,

many countries tend to reply on IMF to resolve its internal issues, thus, it allows IMF to strengthen

its voice in the world of finance and politic. It has a right to monitor the monetary system of its

near-global 188 members; hence, it is possible to declare that the IMF is the central bank of the

world.

3. Where do the IMF gets its funding

In order to become IMF‘s member, country has to assign a quota subscription which is a

primarily financial resource for IMF to fund most of its loans (‗Where the IMF gets its money‘

2012). Through the payment of quotas, it helps determine the financial commitment of each country

to IMF. Furthermore, if there is a lack of financial resource required to address its member‘s needs,

the organization can supplement its resource through borrowing arrangements, including bilateral

and multilateral borrowing arrangements (‗Borrowing arrangement‘ 2012).

4. The ownership and leadership of the IMF

a. The quotas system and its role in determining leadership

Another function of the quota is the determinant of the voting power of each member

country (‗Country Representation‘ 2012). According to Blomberg and Broz, a quota is based upon

an economic position of its member in the world, in other words, the richer countries which provide

more resource will have more influential powers in IMF‘s decision than smaller and poorer ones

(2006).

Please refer to appendix 2 for more the table showing quota and voting shares for IMF‘s

member.


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The current reform

Recently, because of the rapid changes in the global economy and the emergence of fast-

growing national economies such as BRICS, its governance structure is undertaking a reform to

represent effectively and legitimately the interest of its 188 member countries (‗How the IMF

makes decisions‘ 2012). Briefly, the reform will shift the voting powers to a group of dynamic

emerging countries as well as enhance the voice and participation of the poorest countries. As a

result, along with China and Russia, India and Brazil are under way to become to IMF‘s top 10

shareholders which will affect significantly the operational way of IMF(‗How the IMF makes

decisions‘ 2012).

Please refer to appendix 3 for more information about the current IMF‘s reform.

b. Organizational structure:

Figure 2: Organization chart, source: IMF


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Board of governor

Board of Governors is the highest decision-making body of the IMF and voting by mail-in

ballot. It consists of one governor and one alternate governor who are appointed by each member

country. Usually, the selected candidate is the minister of finance or the head of the central bank

(‗Governance structure‘ 2013).

In practice, it has delegated most of the powers and obligations to the IMF‘s Executive

Board, and only remained the right to approve quota increases, special drawing right (SDR)

allocations, the admittances of new members, compulsory withdrawal of members, and

amendments to the Articles of Agreement by By-Laws, and importantly elected the executive

director (‗Governance structure‘ 2013). The International Monetary and Financial Committee

(IMFC) and the Development Committee are the two ministerial committees that are responsible to

advise the Board of Governors (‗Governance Structure‘ 2013).

Please refer to appendix 4 for more information about the two committees.

The Executive Board

The Executive Board which is responsible to take care of IMF‘s daily operation includes 24

board members representing all 188 countries (‗Governance Structure‘ 2012). To be more specific,

it discusses every aspect from the staff‘s annual health checks to economic policy issue relative to

the global economy. The decision normally is progressed based on consensus or, sometime, by

voting. At the end of the meeting, a Summing up which summarizes the organizational view will be

issued.

IMF management

The Executive Board will appoint the Managing Director to become both its chairman and

Head of IMF staff in five years term. The Director is assisted by four Deputy Managing Directors

(‗Governance Structure‘ 2012).

5. Recent activities and projects

Cyrus bailout

In the last few weeks, the IMF has played a significant role in solving the economic failures

in Cyrus Republic, which has been reflected by formal and serious meetings between the Head of

IMF, Christine Lagarde, and European Central Bank President Mario Draghi and Cyrus President

Mr. Anastasiades (Dalton & Steinhauser 2013). The requirement named bank-deposit levy, has

caused lots of criticisms for IMF and EU (Dalton & Steinhauser 2013). There is an assuming that

no bank account is safe which will lead to the total collapse in financial and banking system

(Snyder 2013). Besides, as it agreed reform condition, the country can face a huge jump in


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unemployment rates, business bankruptcies and tax collections along with a downfall in public

investments (Dalton & Steinhauser 2013) As a result, although the final result is still not clear, but,

there would not be a good time for the banking system as well as Cyrus in particular.

The IMF’s financed program in Pakistan

In 2008, due to Pakistan‘s disastrous economic position, the program was signed in order to

support its economy (Rana 2011). However, it has been suspended because the country has failed to

achieve IMF‘s requirements and conditions (Rana 2011). It leads to a huge decline in the economy

as well as an unstable political environment. There are many opposite ideas about this particular

event. For instance, Ahmed has strongly defended the Fund against the criticisms about its realistic

conditions, comparing with the economic situations in Pakistan (2012).

To know more about the economic performances of Pakistan, please refer to appendix 5.

The Asian-based workshop of IMF

The IMF has launched a three-year term project received the supports from 12 participating

members, namely Thailand, Bangladesh, Bhutan, Cambodia, India, Indonesia, Malaysia, Maldives,

Nepal, Philippines, Sri Lanka, and Vietnam. The purpose of the project is to produce higher quality

data including debts, financial balance sheets for the GFS system (‗IMF Workshop Outlines

Japanese-Funded Project to Assist Asian Countries Develop Government Finance Statistics (GFS)

Systems‘ 2012). These fiscal statistics will be compatible with international standards and

consistent with many macroeconomic statistical systems, thus, it will promote the economic

surveillance in order to avoid many unforeseen issues (‗IMF Workshop Outlines Japanese-Funded

Project to Assist Asian Countries Develop Government Finance Statistics (GFS) Systems‘ 2012).

6. The IMF in Vietnam

Vietnam has been being an IMF‘s member since 1976 with the total numbers of share are

equal to 0.193% and the voting right accounts 0.212% (‗Quy tien te quoc te IMF‘ 2012). There are

some notice periods of time between the IMF and Vietnam, including

From 1976 to 1981, the IMF lent out over $200 million USD to Vietnam to help it

resolve problems in balance of payments (‗Quy tien te quoc te IMF‘ 2012).

From 1985 to 1993, because of the overdue debts, the borrowing right of Vietnam is

suspended and the relationship is maintained only through the annual meeting about

the macroeconomic policy (‗Quy tien te quoc te IMF‘ 2012).

From 1993 to 2004, IMF granted four loans with the total financial commitment of

$1.094 million USD.


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From 2004 until now, the IMF has constantly supported Vietnam‘s economy by

offering technical assistance, strategic analysis, advices or training programs etc. in

order to facilitate the economic stability (‗Quy tien te quoc te IMF‘ 2012).

Besides, along with the reform of IMF, Vietnam has slightly increased its shares in the IMF

from 0.4607 billion SDR to 1.1531 billion SDP which reflects Vietnam‘s economic achievements

and more important role in the world map (‗Quy tien te quoc te IMF‘ 2012).

The World Bank

1. The establishment of the World Bank

Along with the IMF, the International Bank for Reconstruction

and Development was official established in 1945 at the Bretton Woods

Conference to assist and rebuild the economic development of Europe

nations by granting loans (‗IMF and the World Bank‘ n.d.). The World

Bank name refers only to the International Bank for Reconstruction and

Development (IBRD) and the International Development Association

(IDA). On the other hand, the term ―World Bank Group‖ represents

five closely associated entities including the IBRD, IDA, the International Finance Corporation

(IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for

Settlement of Investment Disputes (ICSID) (‗About the World Bank‘ 2012). In term of economic

and financial matters, the World Bank was viewed as substantially less important than the IMF

because of having a relatively limited mandate (‗History matters: establishing the World Bank‘

n.d.). Currently, both headquarters of the IMF and the World Bank are in Washington. D.C., United

States.

Please refer to appendix 6 for more information about five organizations of the World Bank.

2. The roles of the World Bank

The World Bank is one of the world‘s largest sources of financial, technical and knowledge

assistance to support development and reduce poverty for the poorest nations, vulnerable or

conflict-affected states (‗what is the World Bank‘ 2012). The organization provides low-interest

loans, interest-free credits and grants to these countries in order to help them invest in education,

health, infrastructure as well as modernizing a financial sector, agriculture and natural resource

management (‗what we do‘ 2012). As a result, it will reduce poverty and improve the living

standards of people in low and middle-income countries in general.

Figure 1: World Bank logo

(khaama, 2009)


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What powers does it have?

It is clear that, there are certain requirements that country has to accept in order to take out

loans. Apart from this, World Bank takes an important role in prescribing sanctions against

corruption and fraudulent by requesting the violators to pay for a penalty (Rajarao and Gupta,

2012).

3. Where does the Bank get its funding?

World Bank finances its funding by four main ways (Pank, 2001) which are:

Obligatory subscription fee from member countries based on the IMF‘s quota

Bond flotation in the global financial markets

Net earnings generated from bank‘s assets

Besides, the Bank also can raise capital through the donations of its member states (Landler

2007).

4. The ownership and leadership of the World Bank

Obligatory Subscription fee determines the number of shares of particular country in the

Bank as well as its voting power (‗Voting power‘ 2012). Currently, the World Bank Group has

totally 188 member countries which are represented by the Board of Governors having the ultimate

decision-making power about all of the organizational matters.

In general, the governors, who are the minister of finance or development of the member

countries, will meet one a year at the Annual Meeting of the Boards of Governors of the World

Bank Group and the International Monetary Fund (‗Leadership‘ 2012). Besides, there will be 25

five Executive Directors. The five largest shareholders, including the United States, the United

Kingdom, France, Germany and Japan will appoint for their own executive directors and the

remaining 20 chairs will represent other member countries (‗Leadership‘ 2012). Additionally, in

fact, the President of the World Bank, who manages day-to-day its operations and direction, always

is a U.S citizen (‗Leadership‘ 2012). That‘s why, there are many complains and criticisms that the

Bank only represents the interest of the developed countries, not the poor nations. With the

pressures from many developing countries, in 2010, the World Bank reformed its voting system to

open an opportunity for emerging countries such as China, Russia etc. to play a more prominent

role in decision making as well as distributing more financial commitments (Stumm 2011).


Dangerous dams

Vidal has figured out that many grant hydroelectric dams in Brazil, Ethiopia, Malaysia, Peru

and Guyana has caused lots of negative impacts on local communities by forcing people off land

http://www.imf.org/


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and destroying the hunting grounds and natural environments (2010). Accordingly, these projects

were funded mainly by the World Bank (Vidal 2010). Despite of having lots of criticisms, the

organization continues to increase its carbon-intensive portfolio and support financing projects in

polluting industry. That‘s why the Bank is blamed for its responsibility in climate change.

Water privatization in Bolivia

In the late 20th

Century, the IMF and World Bank strongly supported and financed many

water privatization programs to promote economic growth (‗Privatization of Water in Bolivia‘

2013). Particularly, the case in Bolivia is one of the most controversial projects because of its

consequences. During the process, many private firms had to invest heavily in infrastructures, water

pumps etc. which led to a rapid increase water price (‗Privatization of Water in Bolivia‘ 2013). As a

result, the poor citizens cannot afford the price which causes the serious lack of water throughout

the country. That‘s why, there were many riots happening in Bolivia which damaged the

confidences of international investors as well as affecting significantly its economy (‗Privatization

of Water in Bolivia‘ 2013). In fact, the country was forced by the many borrowing requirements of

the World Bank (Shultz 2005). Besides, the companies benefited from the program mainly came

from the developed member countries (Shultz 2005). For that reasons, the organization should be

responsible for its implementations, however, it was not.

6. The World Bank in Vietnam

Since the joining date in 1956, Vietnam has been of the biggest IDA‘s borrowers (‗Ngan

hang the gioi‘ 2012). It has started to borrow from IDA since 1993 and from IBRD since 2009.

Throughout the time, the country and the Bank have cooperated intensively in approximately 111

projects having the total value of $15 billion USD (‗Ngan hang the gioi‘ 2012). These projects

which conduct under many programs named PRSC, EMCC and PIR mainly concentrate on

infrastructure, energy, environment, education, medical and social service to promote the economic

and social development in Vietnam (‗Ngan hang the gioi‘ 2012). Besides, annually, Vietnam and

the Bank together hold a meeting to call for many external investments and technical assistances.

Importantly, since 2011, the government has agreed to implement the FSAP program, which has

been launched by the World Bank and the IMF, to stabilize the economic development and

condition in Vietnam (―Ngan hang the gioi‘ 2012).


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The bank for International Settlement

1. The establishment of the BIS

After World War I, in the context of Young Plan

(1930) - a program for settlement of German reparation

debts, the bank for International Settlements (BIS) was

established and funded by the state banks of six founding

countries, namely Japan, France, Germany, Belgium, Italy

and United Kingdom to collect, administrate and distribute

the annuity reparations (‗BIS history and overview‘ n.d.).

The BIS which is the world‘s oldest international financial

institution has remained the principal centre for international bank cooperation in pursuit of

monetary and financial stability (‗About BIS‘ n.d.).

Since 1930, the head office has been located in Basel, Switzerland, with the representative

offices in Hong Kong and Mexico City (‗representative office‘ n.d.). The bank only offers banking

services for central banks and international organizations (‗About BIS‘ n.d.), in other words, it is

the bank for state banks. Annually, there has been a general meeting between its member banks to

discuss about several aspects of the world economy and financial markets.

2. The aims and objectives of the BIS

The role of BIS has been changing overtime, and since the late 1970s, it has functioned as a

cooperation framework for the central banks and financial regulators in the world to pool their

thinking and ideas about many financial aspects (‗BIS history overview n.d.). Besides, from the

beginning until now, it has been expected to become a world senior financial regulator to observe

the coordinated regulation and satisfy the need for some form of unified control (Felsenfeld & Bilali

2004). Moreover, it always has offered a variety of banking functions and provided an emergency

financing for the central bank community as well as serving trustee and agency functions (‗BIS

history overview n.d.). Its roles have been reflected by four following types of activity.

a. A meeting place for central banks

The regular meetings of Governors and senior officials of member central banks which

holds every two months in Basel is the most important meeting at the BIS. In there, the participants

will discuss and exchange view on various aspects from world economy to topical issues of central

Figure 4: BIS logo (psylords, 2011)


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bank (‗BIS activities‘ n.d.). The main purpose of the meetings is to improve the understanding of

the member about the developments, challenges and policies influencing several countries or

markets in order to promote monetary and financial stability.

b. Researches and statistics

In order to support its meeting and the activities of the Basel-based committee, the BIS has

carried out several economic, monetary, financial and legal research. Furthermore, it also acts as a

hub for sharing and publishing statistics and information on global banking, securities, and foreign

exchange and derivative markets amongst state banks.

For more details about the BIS statistic, please refer to appendix 7.

c. Seminars and workshops

The Financial Stability Institute has organized many workshops and meetings to familiarise

financial sector and provide practical training for participants.

d. Banking service for central banks

The bank offers many financial services designed to assist central banks and other official

monetary institutions. To be more specific, its products range from standard services such as sight

account, fixed-term deposits to more sophisticated financial products which help increase the return

on central banks‘ foreign assets. Also, the bank conducts foreign exchange and gold operations as

well as providing lots of asset management services for its clients. Importantly, the BIS does not

provide services for private organizations or corporate entities.

Appendix 8 will provide further information about current bank service of BIS

What powers do the BIS has?

BIS has possessed legal authorities which are responsible to regulate, supervise banks, and

undertake appropriate actions and penalties to guarantee the safety concerns (BIS, 2012).

In accordance, the bank has power as below (BIS, 2012):

Fully access to member banks‘ Boards, staff and governors to check the compliance.

Review the core activities of banks.

Supervise the jurisdiction in beyond-border activities.

Moreover, BIS is able to review the activities of the parent companies and even the inter-

related entities to evaluate the effect on the safety concerns of the bank (BIS, 2012).

3. The ownership and leaderships of the BIS

a. Organizational structure


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When the BIS‘s initial capital was raised, participating banks can either keep the whole of

their allocated shares or arrange those shares to be traded by the public (‗Bank for International

Settlement‘ 2007). As a result, some 86% of the issued shares are registered in the name of central

banks, and the remaining 14% which consist of part of the French and Belgian issues and all of

original U.S shares issued, are held by private shareholders, including J. P. Morgan & Company,

First National Bank of New York and First National Bank of Chicago (Felsenfeld & Bilali 2004). In

addition, despite of receiving dividend, private shareholders do not allow to participate in the annual

meeting of BIS, in other words, they don‘t have a voting right. Currently, there are sixty institutions

that have the right to vote and represent at General Meeting.

For the names of sixty institutions, please refer to appendix 9.

b. Decision-making bodies

The BIS is managed by three decision-making bodies, including the Board of Governors, the

Board of Directors and the Bank Management.

Firstly, The Board of Directors, which includes three types of members, namely Officio,

Appointed and Elected members, will elect a chairman among its members for a three-year term

and appoint the bank‘s president (‗Board of Directors‘ 2013). Besides, it holds a General Meeting to

vote on many organizational matters such as banking regulatory, governance issues etc.

The second decision-making body is the Board of Directors which is responsible to

determine the strategy of the Bank as well as electing the President and vice-President (Marriott

2007). It includes heads of the state banks of Belgium, France, Germany, Italy, United Kingdom

and United States. It will be assisted by four advisory committees, including

The Administrative Committee

The Banking and Risk Management Committee

The Audit Committee

The Nomination Committee

The Bank Management, the third decision-making body, is leaded by the General Manager,

who is responsible to the Board of Directors for the day-to-day operations.

Please refer to appendix 10 for more information about four types of committees.


Currently, The BIS and the BCBS have putted pressure on many U.S-based banks to

liquidate their assets, including bonds, mortgages, loans and stock shares (Posel 2013). The purpose

of this critical decision is to appease the global market in order to support the economic recovery as

well as guarantee the stability of the banks (Posel 2013). The taxpayers are given until 2019 to

http://www.bis.org/about/auditcommitteecharter.pdf


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comply with the new regulations. Although the final result is still a question, it has sent a strong

signal to the capital world that the BIS still plays a significant role in the current monetary system

(Posel 2013).

Another undertaking is about the liquidity in Government and the bond market which

concentrates on the issues of trading in two markets, whose data is depended on an entire

transaction from 2007 to 2011 (Dick, Gyntelberg and Sangill, 2012).

5. The BIS in Vietnam

BIS has conducted a research on the monetary policy in Vietnam, mainly concentrating on

the microeconomic and macroeconomic policy in the context of deregulation for commercial

expansion (Camen 2010). The study has been drawing an overall and clear picture of Vietnam‘s

economy. Besides, the bank has indicated the key issues which require lots of effort to resolve.

Furthermore, the research also points out the remedy in order to facilitate the economy performance

in the middle of recession (Camen 2010).

The Asian Development Bank

1. The establishment of the Asian Development Bank (ADB)

The Asian Development Bank was established in 1966

with the main mission of reducing poverty in Asian Pacific region

(‗Overview‘ n.d.). To be more specific, by cooperating with many

member countries, independent specialists and many financial

institutions, the bank provides loans, technical assistance as well

as delivering projects that could facilitate economic developments

(‗Key fact‘ n.d.). Currently, the ADB – the third largest financial

provider for development in the region, has located it‘s

headquarter in Manila, Philippines and 3 other representative

offices in Tokyo, Frankfurt and Washington, DC (‗Key fact‘ n.d.). Besides, it has totally 67

members including 48 regional counties and 19 non-regional members (‗Members‘ n.d.).

2. The Aims and Objectives

In accordance with its name, the main objective of ADB is to reduce poverty in Asian

countries (‗Overview‘ n.d.). With approximately 1.7 billion people, the ADB has faced with lots of

challenges to assist in investing to essential services such as education, health care, or even

opportunities to develop (‗Overview‘ n.d.). Through lending programs, sponsorships, co-financing,

Figure 5: ADB logo (phtpacific, 2012)


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the ADB has mainly concentrated over 80% of its capital (‗Policies and strategies‘ n.d.) on

following sectors

Infrastructure, including transport and communications, energy, water supply and

sanitation and urban development

Environment

Regional cooperation and integration

Education

Health, agriculture, and disaster and emergency assistance

Apart from the social supports, ADB also aims to ensure the development in economic

matters (Kuroda 2011). The organization provides technical assistances to improve financial

systems, monetary policies, inflation-controlling as well as improving economic growth rate of

member countries and employment rate (Kuroda 2011).

3. How does the ADB raise its funding?

There are three main ways for the ADB to finance its operation activities, namely

Issuing bonds

Recycling the repayment of loans

Retaining earning from the lending operations

Receiving contributions from its donor countries

Besides, it also uses co-financing to raise capital for many projects through the development

assistance windows of external partners, namely government, financial agencies and international

organizations (‗Unpacking the ADB: A guide to the Asian Development Bank‘ n.d.).

4. The ownership and leaderships of the ADB

The Board of Governor has the ultimate words in the bank‘s decision-making. In fact,

because of delegating most of the authority to the Board of Executive Director, the Board of

Governor has a limited role in day-to-day operation. The three largest shareholders, including Japan

(15.7%), China (6.5%) and the U.S (15.7%), appoint for their own Executive Directors (ED), while

other nine EDs represent many groups of countries (‗Unpacking the ADB: A guide to the Asian

Development Bank‘ n.d.). Besides, because of being large shareholders, India and Australia is

always a head of their represented groups. Additionally, many western nations (non-regional

members) also play a significant role in the board, which is reflected by their own two ED chairs.

Traditionally, the Bank‘s resident always is a citizen of its most influential member – Japan

(‗Unpacking the ADB: A guide to the Asian Development Bank‘ n.d.).


Page 18 of 42

According to Minder (2008), there are many criticisms that Japan is dominating a working

process in the Bank which potentially leads to several inappropriate and questionable decisions.

That‘s why the U.S, U.K and other big donors are requiring the overhaul in many aspects from

staffing to oversight procedure at ADB (Minder 2008).


Under the guidance of the ADB, Southwest Integrated Water Resource Management Project

has caused a negative impact on people‘s lives and livelihoods. The public blames the organization

on its irresponsibility on safeguard which results in the violating in people‘s development right

(Farjana 2009). Apart from this, the ActionAid International also reported many critical case studies

from Vietnam, Nepal, Bangladesh and Cambodia in which the bank has lots of failures resulting

increase in poverty, environmental damage, food and economic crisis (‗ASIA: Capital boost will

not help the poor – NGOs‘ n.d.). Particularly, 20.000 people in Nepal were forced to ―evacuate‖

from their land in order to create place for ADB-funded West Seti Hydropower Project. In

Bangladesh, because of its water resource management project, over 60.000 small farmers,

fishermen, households had loosed their living ground (‗ASIA: Capital boost will not help the poor –

NGO‘s n.d.). These results have reminded public about the remaining issues of ADB, namely the

efficiency of its capital usages.

Finally, it is also concerned about its neutral position in the politic aspect because the 60-

million-dollar watershed protection project in the Arunachal Pradesh. This region is famous for the

territorial conflicts between China and India (‗China slams ADB over India funding‘ 2009).

6. The ADB in Vietnam

Since 1993, Vietnam has been being received valuable supports in reducing poverty,

improving governance, sustaining growth rates, or assisting policy reforms, etc. The ABD has

supported Vietnam with 133 sovereign and non-sovereign loans worth of $10.68 billion, 311

technical assistance projects totalling $242.3 million, and 26 other grants accounting $150.1 million

(‗Asian Development Bank and Vietnam‘ 2011). Thanks to the enormous contribution of ADB, the

country has achieved a dynamic economic growth rate (‗Asian Development Bank and Vietnam‘

2011). Besides, Vietnam has also been assisted substantially by the ABD to improve the social

issues such as renewable energy, environment protection, inflation control, etc. (‗Asian

Development Bank and Vietnam‘ 2011).

Apart from this, with the incentives of low-interest loans, the ABD helped a lot in solving

current social dilemmas as well as forming over 117 investment projects which is worth

approximately $3.371 billion (‗Asian Development Bank and Vietnam‘ 2011).


Page 19 of 42

Reference

List of figures

Figure 1: IMF logo. Source: Sialnews. Available at: http://www.sialnews.com/business-news/imf-

warns-pakistan-economy-deteriorating/

Figure 2: Organizational structure, source: IMF website. Available at:

http://www.imf.org/external/np/obp/orgcht.htm

Figure 3: World Bank logo. Source: Khaama. Available at: http://www.khaama.com/world-bank-

pledges-52-million-to-support-mine-extraction-in-afghanistan

Figure 4: BIS logo. Source: Psylords. Available at: http://www.psylords.info/news/the-tower-of-

basel/

Figure 5: ADB logo. Source: Phtpacific. Available at: https://www.phtpacific.org/organisations/adb

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Page 21 of 42

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Page 23 of 42


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Page 24 of 42

Appendices

Appendix 1:

The new concessional facilities for LICs became effective in January 2010 under the

Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund‘s

financial support more flexible and better tailored to the diverse needs of LICs. Access limits and

norms have been approximately doubled compared to pre-crisis levels. Financing terms have been

made more concessional, and the interest rate is reviewed every two years. All facilities support

country-owned programs aimed at achieving a sustainable macroeconomic position consistent with

strong and durable poverty reduction and growth.

The Extended Credit Facility (ECF) succeeds the Poverty Reduction and Growth Facility

(PRGF) as the Fund‘s main tool for providing medium-term support to LICs with protracted

balance of payments problems. Financing under the ECF currently carries a zero interest rate, with a

grace period of 5½ years, and a final maturity of 10 years.

The Standby Credit Facility (SCF) provides financial assistance to LICs with short-term

balance of payments needs. The SCF replaces the High-Access Component of the Exogenous

Shocks Facility (ESF), and can be used in a wide range of circumstances, including on a

precautionary basis. Financing under the SCF currently carries a zero interest rate, with a grace

period of 4 years, and a final maturity of 8 years.

The Rapid Credit Facility (RCF) provides rapid financial assistance with limited

conditionality to LICs facing an urgent balance of payments need.The RCF streamlines the Fund‘s

emergency assistance for LICs, and can be used flexibly in a wide range of circumstances.

Financing under the RCF currently carries a zero interest rate, has a grace period of 5½ years, and a

final maturity of 10 years.

Stand-By Arrangements (SBA). The bulk of non-concessional IMF assistance is provided

through SBAs. The SBA is designed to help countries address short-term balance of payments

problems. Program targets are designed to address these problems and disbursements are made

conditional on achieving these targets (‗conditionality‘). The length of a SBA is typically 12–24

months, and repayment is due within 3¼-5 years of disbursement. SBAs may be provided on a

precautionary basis—where countries choose not to draw upon approved amounts but retain the

option to do so if conditions deteriorate—both within the normal access limits and in cases of

exceptional access. The SBA provides for flexibility with respect to phasing, with front-loaded

access where appropriate.


Page 25 of 42

Flexible Credit Line (FCL). The FCL is for countries with very strong fundamentals,

policies, and track records of policy implementation and is useful for both crisis prevention and

crisis resolution. FCL arrangements are approved, at the member country‘s request, for countries

meeting pre-set qualification criteria. The length of the FCL is one or two years (with an interim

review of continued qualification after one year) and the repayment period the same as for the SBA.

Access is determined on a case-by-case basis, is not subject to the normal access limits, and is

available in a single up-front disbursement rather than phased. Disbursements under the FCL are

not conditional on implementation of specific policy understandings as is the case under the SBA

because FCL-eligible countries are trusted to be able to implement appropriate macroeconomic

policies. There is flexibility to either draw on the credit line at the time it is approved or treat it as

precautionary. In case a member country draws, the repayment term is the same as that under the

SBA.

Precautionary and Liquidity Line (PLL). The PLL replaced the Precautionary Credit Line

(PCL), building on its strengths and enhancing its flexibility. The PLL can be used for both crisis

prevention and crisis resolution purposes by countries with sound fundamentals and policies, and a

track record of implementing such policies.

PLL-eligible countries may face moderate vulnerabilities and may not meet the FCL

qualification standards, but they do not require the same large-scale policy adjustments normally

associated with SBAs. The PLL combines qualification (similar to the FCL) with focused ex-post

conditions that aim at addressing the identified remaining vulnerabilities in the context of semi-

annual monitoring. Duration of PLL arrangements can be either six months or 1-2 years. Access

under the six-month PLL is limited to 250 percent of quota in normal times, but this limit can be

raised to 500 percent of quota in exceptional circumstances where the balance of payments need is

due to exogenous shocks, including heightened regional or global stress. 1-2 year PLL

arrangements are subject to an annual access limit of 500 percent of quota and a cumulative limit of

1000 percent of quota. The repayment term of the PLL is the same as for the SBA.

Extended Fund Facility (EFF). This facility was established in 1974 to help countries

address medium- and longer-term balance of payments problems reflecting extensive distortions

that require fundamental economic reforms. Arrangements under the EFF are thus longer than

SBAs—normally not exceeding three years at approval, with a maximum extension of up to one

year where appropriate. However, a maximum duration of up to four years at approval is also

allowed, predicated on the existence of a balance of payments need beyond the three-year period,

the prolonged nature of the adjustment required to restore macroeconomic stability, and the


Page 26 of 42

presence of adequate assurances about the member‘s ability and willingness to implement deep and

sustained structural reforms. . Repayment is due within 4½–10 years from the date of disbursement.

Rapid Financing Instrument (RFI). The RFI was introduced to replace and broaden the

scope of the earlier emergency assistance policies. The RFI provides rapid financial assistance with

limited conditionality to all members facing an urgent balance of payments need. Access under the

RFI is subject to an annual limit of 50 percent of quota and a cumulative limit of 100 percent of

quota. Emergency loans are subject to the same terms as the FCL, PLL and SBA, with repayment

within 3¼–5 years.


Page 27 of 42

Appendix 2

Director

Alternate Casting Votes of

Votes by

Country

Total

Votes1

Percent

of

Fund

Total2

Appointed

Meg Lundsager

Vacant

United States 421,961 421,961 16.75

Daikichi Momma

Tomoyuki Shimoda

Japan 157,022 157,022 6.23

Hubert Temmeyer

Steffen Meyer

Germany 146,392 146,392 5.81

Herve Jodon de Villeroche

Alice Terracol

France 108,122 108,122 4.29

Stephen Field

Christopher Yeates

United Kingdom 108,122 108,122 4.29

Director

Alternate Casting Votes of

Votes by

Country

Total

Votes1

Percent

of Fund

Total2

Elected

Menno Snel

Willy Kiekens

Yuriy G. Yakusha

Armenia 1,657

Belgium 46,789

Bosnia and Herzegovina 2,428

Bulgaria 7,139

Croatia 4,388

Cyprus 2,319

Georgia 2,240

Israel 11,348

Luxembourg 4,924

Macedonia, former

Yugoslav Republic of 1,426

http://www.imf.org/external/np/sec/memdir/eds.aspx#1





Page 28 of 42

Moldova 1,969

Montenegro 1,012

Netherlands 52,361

Romania 11,039

Ukraine 14,457 165,496 6.57

Jose Rojas

Fernando Varela

Maria Angelica Arbelaez

Colombia 8,477

Costa Rica 2,378

El Salvador 2,450

Guatemala 2,839

Honduras 2,032

Mexico 36,994

Spain 40,971

Venezuela, República

Bolivariana de 27,328 123,469 4.90

Andrea Montanino

Thanos Catsambas

Albania 1,337

Greece 11,755

Italy 79,560

Malta 1,757

Portugal 11,034

San Marino 961 106,404 4.22

Der Jiun Chia

Abdul Rasheed Ghaffour

Brunei Darussalam 2,889

Cambodia 1,612

Fiji, Republic of 1,440

Indonesia 21,530

Lao People's Democratic

Republic 1,266

Malaysia 18,476

Myanmar 3,321

Nepal 1,450

Philippines 10,930

Singapore 14,817

Thailand 15,142


Page 29 of 42

Tonga 806

Vietnam 5,344 99,023 3.93

Tao Zhang

Ping Sun

China

95,996 95,996 3.81

Jong-Won Yoon

Ian Davidoff

Australia 33,101

Kiribati 793

Korea 34,401

Marshall Islands 772

Micronesia, Federated

States of 788

Mongolia 1,248

New Zealand 9,683

Palau 768

Papua New Guinea 2,053

Samoa 853

Seychelles 846

Solomon Islands 841

Tuvalu 755

Uzbekistan 3,493

Vanuatu 907 91,302 3.62

Thomas Hockin

Mary T. O'Dea

Antigua and Barbuda 872

Bahamas, The 2,040

Barbados 1,412

Belize 925

Canada 64,429

Dominica 819

Grenada 854

Ireland 13,313

Jamaica 3,472

St. Kitts and Nevis 826

St. Lucia 890

St. Vincent and the

Grenadines 820 90,672 3.60


Page 30 of 42

Audun Groenn

Pernilla Meyersson

Denmark 19,651

Estonia 1,676

Finland 13,375

Iceland 1,913

Latvia 2,158

Lithuania 2,576

Norway 19,574

Sweden 24,692 85,615 3.40

Momodou Bamba Saho

Chileshe Mpundu

Kapwepwe

O. Joseph Nnanna

Angola 3,600

Botswana 1,615

Burundi 1,507

Eritrea 896

Ethiopia 2,074

Gambia, The 1,048

Kenya 3,451

Lesotho 1,086

Liberia 2,029

Malawi 1,431

Mozambique 1,873

Namibia 2,102

Nigeria 18,269

Sierra Leone 1,774

South Africa 19,422

South Sudan, Republic of 1,967

Sudan 2,434

Swaziland 1,244

Tanzania 2,726

Uganda 2,542

Zambia 5,628

Zimbabwe 4,271 82,989 3.29

A. Shakour Shaalan

Sami Geadah

Bahrain 2,087

Egypt 10,174


Page 31 of 42

Iraq 12,621

Jordan 2,442

Kuwait 14,548

Lebanon 3,401

Libya 11,974

Maldives 837

Oman 3,107

Qatar 3,763

Syrian Arab Republic 3,673

United Arab Emirates 8,262

Yemen, Republic of 3,172 80,061 3.18

Johann Prader

Miroslav Kollar

Austria 21,876

Belarus 4,601

Czech Republic 10,759

Hungary 11,121

Kosovo 1,327

Slovak Republic 5,012

Slovenia 3,487

Turkey 15,295 73,478 2.92

Rakesh Mohan

Kosgallana Durage

Ranasinghe

Bangladesh 6,070

Bhutan 800

India 58,952

Sri Lanka 4,871 70,693 2.81

Ahmed Abdulkarim

Alkholifey

Fahad Ibrahim A

Alshathri

Saudi Arabia

70,592 70,592 2.80

Rene Weber

Dominik Radziwill

Azerbaijan 2,346

Kazakhstan 4,394

Kyrgyz Republic 1,625

Poland 17,621

Serbia 5,414


Page 32 of 42

Switzerland 35,322

Tajikistan 1,607

Turkmenistan 1,489 69,818 2.77

Paulo Nogueira Batista,

Jr.

Hector R. Torres

Ivan Luis Goncalves de

Oliveira Lima

Brazil 43,242

Cape Verde 849

Dominican Republic 2,926

Ecuador 4,215

Guyana 1,646

Haiti 1,556

Nicaragua 2,037

Panama 2,803

Suriname 1,658

Timor-Leste 819

Trinidad and Tobago 4,093 65,844 2.61

Aleksei V. Mozhin

Andrei Lushin

Russian Federation

60,191 60,191 2.39

Jafar Mojarrad

Mohammed Dairi

Afghanistan, Islamic

Republic of 2,356

Algeria 13,284

Ghana 4,427

Iran, Islamic Republic of 15,709

Morocco 6,619

Pakistan 11,074

Tunisia 3,602 57,071 2.26

Pablo Garcia-Silva

Sergio Chodos

Argentina 21,908

Bolivia 2,452

Chile 9,298

Paraguay 1,736

Peru 7,121

Uruguay 3,802 46,317 1.84

Kossi Assimaidou

Ngueto Tiraina Yambaye

Benin 1,356

Burkina Faso 1,339


Page 33 of 42

Cameroon 2,594

Central African Republic 1,294

Chad 1,403

Comoros 826

Congo, Democratic

Republic of the 6,067

Congo, Republic of 1,583

Côte d'Ivoire 3,989

Djibouti 896

Equatorial Guinea 1,260

Gabon 2,280

Guinea 1,808

Mali 1,670

Mauritania 1,381

Mauritius 1,753

Niger 1,395

Rwanda 1,538

São Tomé and Príncipe 811

Senegal 2,355

Togo 1,471 39,069 1.55

Total of eligible Fund

votes 2,515,719

3

99.84

4




Page 34 of 42

Appendix 3

Reform of the IMF‘s governance began in earnest in 2006, when a process to realign

members‘ quotas and voting power received the backing of the membership. The 2008 quota and

voice reform—which provides for ad hoc quota increases for a group of dynamic emerging market

countries, as well as measures to enhance the voice of low-income countries—became effective on

March 3, 2011.

In October 2009, the IMF‘s policy steering committee, the International Monetary and

Financial Committee, endorsed a call by G-20 leaders to aim for an even more ambitious reform

effort, while protecting the voting share of the poorest member countries. On December 15, 2010,

the IMF Board of Governors approved the 14th General Review of Quotas, which will double

members‘ quotas and will result in a further shift of more than 6 percentage points in quota share to

dynamic emerging market and developing countries, exceeding what the IMFC had called for.

Further, there was also agreement to preserve the gains in the voting power of the poorest member

countries achieved in the 2008 reforms. Once in effect, India and Brazil will join China and Russia

as part of the top 10 shareholders of the IMF.

The 24-member Executive Board also agreed on a restructuring of the way it operates,

paving the way for an increase in the representation of dynamic emerging market and developing

countries in the day-to-day decision-making at the IMF. Once the quota and governance reforms are

in effect, there will be two fewer Board members from advanced European countries, and all

Executive Directors will be elected rather than appointed, as some are now. The size of the Board

will remain at 24, and its composition will be reviewed every 8 years.

Each member country is committed to using its best efforts to ratify these reforms by the

time of the 2012 Annual Meetings. The Board of Governors also requested that the Executive

Board complete a comprehensive review of the quota formula by January 2013.




http://www.imf.org/external/np/sec/misc/consents.htm#a1

http://www.imf.org/external/np/exr/facts/ams.htm


Page 35 of 42

Appendix 4

a. International Monetary and Financial Committee

The IMFC is responsible for advising, and reporting to, the IMF Board of Governors as it

manages and shapes the international monetary and financial system. The IMFC also monitors

developments in global liquidity and the transfer of resources to developing countries; considers

proposals by the Executive Board to amend the Articles of Agreement; and deals with unfolding

events that may disrupt the global monetary and financial system.

The IMFC usually meets twice a year, in September or October at the Bank-Fund Annual

Meetings and in March or April at what are referred to as the Spring Meetings. The Committee

discusses matters of concern affecting the global economy and also advises the IMF on the direction

of its work. At the end of the meetings, the Committee issues a communiqué summarizing its views.

These communiqués provide guidance for the IMF's work program during the six months leading

up to the next Spring or Annual Meetings. There is no formal voting at the IMFC, which operates

by consensus.

The IMFC has 24 members who are central bank governors, ministers, or others of

comparable rank and who are drawn from the governors of the Fund's 188 member countries. The

membership reflects the composition of the IMF's Executive Board: each member country that

appoints, and each group of member countries that elects, an Executive Director appoints a member

of the IMFC. The group is currently chaired by Tharman Shanmugaratnam, Deputy Prime Minister

and Minister for Finance of Singapore, who was selected to head the Committee in March 2011. A

number of international institutions, including the World Bank, participate as observers in the

IMFC's meetings.

IMFC Membership

Nationalities of current members:

Singapore (Chair)

Algeria

Argentina

Australia

Belgium

Brazil

Canada

China

France

Gabon

Germany

India

Indonesia

Italy

Japan

Netherlands

Russia

Saudi Arabia

South Africa

Spain

Sweden

Switzerland

United Arab Emirates

United Kingdom

United States

b. Development Committee

The Joint Ministerial Committee of the Boards of Governors of the Bank and Fund on the

Transfer of Real Resources to Developing Countries, better known as theDevelopment Committee,

was established in October 1974 to advise the Boards of Governors of the IMF and World Bank on


http://web.worldbank.org/WBSITE/EXTERNAL/DEVCOMMEXT/0,,menuPK:64060743~pagePK:60000303~piPK:64000842~theSitePK:277473,00.html


Page 36 of 42

critical development issues and on the financial resources required to promote economic

development in developing countries. Over the years, the Committee has interpreted its mandate to

include trade and global environmental issues in addition to traditional development matters. The

Committee usually meets twice a year following the IMFC meeting.

The Development Committee has 25 members (usually ministers of finance or development)

who together represent the full membership of the IMF and World Bank. The present chairperson is

Marek Belka, President of the National Bank of Poland.

Development Committee Membership

Poland (Chair)

Argentina

Bahrain

Belgium

Brazil

Canada

China

Côte d‘Ivoire

Denmark

France

Germany

India

Indonesia

Italy

Japan

Mexico

Morocco

Netherlands

New Zealand

Nigeria

Russia

Saudi Arabia

Switzerland

United Kingdom

United States

Zimbabwe


Page 37 of 42

Appendix 5:

Performance under the programme

When Pakistan started the programme, inflation had just hit 25.6%, the budget deficit was

projected at 7.4% of the total size of the economy and foreign exchange reserves would barely

cover six weeks‘ worth of imports.

During the first year of programme, the budget deficit came down to 5.2% of gross domestic

product, still higher than the IMF-approved limit. In fiscal years 2010 and 2011, the deficit has been

6.2% and 6.5% of GDP respectively, bringing the three-year average to above 6% of GDP and far

beyond what would be acceptable to the IMF.

Foreign exchange reserves have risen to $18 billion. But if one removes the effect of the

IMF loan and aid from friendly nations, the central bank‘s foreign exchange reserves would drop to

more or less the same level as 2008. Inflation is still in double digits.

The government was required to increase the tax-to-GDP ratio but, at 8.5%, it is the lowest

it has been in 27 years.


Page 38 of 42

Appendix 6

The International Bank for Reconstruction and Development (IBRD) aims to reduce

poverty in middle-income countries and creditworthy poorer countries by promoting sustainable

development through loans, guarantees, risk management products, and analytical and advisory

services. Established in 1944 as the original institution of the World Bank Group, IBRD is

structured like a cooperative that is owned and operated for the benefit of its 188 member countries.

IBRD raises most of its funds on the world's financial markets and has become one of the most

established borrowers since issuing its first bond in 1947. The income that IBRD has generated over

the years has allowed it to fund development activities and to ensure its financial strength, which

enables it to borrow at low cost and offer clients good borrowing terms.

Appendix 7:

The BIS international financial statistics are a unique source of information on various

elements of the global financial system. They include data on:

The cross-border lending and borrowing of internationally active banks in key

financial centres, including offshore centres (banking statistics)

Issuing activity in international and domestic securities markets (securities statistics)

Operations in over-the-counter and exchange-traded derivatives markets (derivatives

statistics)

Effective exchange rate (EER) indices for 58 economies (effective exchange rates)

Operations in the global foreign exchange markets (foreign exchange statistics)

External debt positions of individual countries based on BIS banking and securities

statistics as well as on data from other international organisations (external debt

statistics)

Payment and settlement systems in major financial centres (payment statistics)

Residential property, commercial property and land price indices for 46 economies

(property price statistics)

Long series on credit to private non-financial sectors for 40 economies (credit to private

statistics)

The International Association of Insurance Supervisors, which operates from the BIS,

publishes data on the global reinsurance market.


http://www.bis.org/statistics/about_banking_stats.htm

http://www.bis.org/statistics/secstats.htm

http://www.bis.org/statistics/derstats.htm

http://www.bis.org/statistics/derstats.htm

http://www.bis.org/statistics/eer/index.htm

http://www.bis.org/triennial.htm

http://www.bis.org/publ/r_debt.htm

http://www.bis.org/publ/r_debt.htm

http://www.bis.org/statistics/payment_stats.htm

http://www.bis.org/statistics/pp.htm

http://www.bis.org/statistics/credtopriv.htm

http://www.bis.org/statistics/credtopriv.htm


Page 39 of 42

Appendix 8

The BIS offers a wide range of financial services specifically designed to assist central

banks and other official monetary institutions in the management of their foreign exchange reserves.

Some 140 customers, including various international financial institutions, currently make use of

these services and on average, over the last few years, some 4% of global foreign exchange reserves

have been invested by central banks with the BIS. BIS financial services are provided out of two

linked trading rooms: one at its Basel head office and one at its office in Hong Kong SAR.

The Bank continually adapts its product range in order to respond more effectively to the

evolving needs of central banks. Besides standard services such as sight/notice accounts and fixed-

term deposits, the Bank has developed a range of more sophisticated financial products which

central banks can actively trade with the BIS to increase the return on their foreign assets. The Bank

also transacts foreign exchange and gold on behalf of its customers.

In addition, the BIS offers a range of asset management services in sovereign securities or

high-grade assets. These may be either a specific portfolio mandate negotiated between the BIS and

a central bank or an open-end fund structure - the BIS Investment Pool (BISIP) - allowing

customers to invest in a common pool of assets. The two Asian Bond Funds (ABF1 and ABF2) are

administered by the BIS under the BISIP umbrella: ABF1 is managed by the BIS and ABF2 by a

group of external fund managers.

The BIS extends short-term credits to central banks, usually on a collateralised basis. From

time to time, the BIS also coordinates emergency short-term lending to countries in financial crisis.

In these circumstances, the BIS advances funds on behalf of, and with the backing and guarantee of,

a group of supporting central banks.

The Bank's Statutes do not allow the Bank to open current accounts in the name of, or make

advances to, governments. The BIS does not accept deposits from, or generally provide

financial services to, private individuals or corporate entities.

http://www.bis.org/banking/finserv.htm

http://www.bis.org/about/legal.htm


Page 40 of 42

Appendix 9

Sixty institutions currently have rights of voting and representation at General Meetings: the

central banks or monetary authorities of Algeria, Argentina, Australia, Austria, Belgium, Bosnia

and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia, the Czech Republic,

Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong SAR, Hungary, Iceland, India,

Indonesia, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, the Republic of

Macedonia, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Peru, the Philippines,

Poland, Portugal, Romania, Russia, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South

Africa, Spain, Sweden, Switzerland, Thailand, Turkey, the United Arab Emirates, the United

Kingdom and the United States, plus the European Central Bank.


Page 41 of 42

Appendix 10

The Administrative Committee reviews key areas of the Bank's administration, such as

budget and expenditures, HR policies and IT.

The Banking and Risk Management Committee addresses the financial objectives and the

business model for BIS banking operations, and the risk management framework of the BIS.

The Audit Committee is the Board's contact with Internal & External Auditors and

Compliance, and examines the implementation of the Bank's risk management framework

and policies.

The Nomination Committee deals with the appointment of the six members of the BIS

Executive Committee.

http://www.bis.org/about/auditcommitteecharter.pdf


Page 42 of 42

Documents

Research about four biggest financial institutions