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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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