International Institutions That Facilitate Trade Essay

7297 WordsSep 3, 201530 Pages
INTERNATIONAL MONETARY FUND Formed in 1944 at the Bretton Woods Conference, the International Monetary Fund (IMF) came into formal existence in 1945 with 44 member countries, with the goal of reconstructing the international payment system. Popularly referred to as one of the Bretton Woods institutions, IMF is headquartered in Washington DC America, and currently has 186 countries as its members. The objectives and functions of IMF include the following: - To foster global monetary cooperation - Secure financial stability - Facilitate international trade - Promote high employment and sustainable economic growth - And, reduce poverty around the world The IMF was established to support the monetary system by facilitating cooperation on international monetary issues, providing advisory and technical assistance to members, and offering emergency lending to nations experiencing repeated difficulties restoring the balance of payments equilibrium. Countries contribute funds to a pool through a quota system from which countries with payment imbalances can borrow. As of 2010, the fund had XDR476.8 billion, about US$755.7 billion at then-current exchange rates (IMF, 2015). Member states are and encouraged to employ capital controls as necessary to manage payments imbalances and Page 1 of 29 meet pegging targets, but prohibited from relying on IMF financing to cover particularly shortterm capital hemorrhages. THE WORLD BANK GROUP The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and most famous development bank in the world comprising 183 member countries, and is an observer at the United Nations Development Group. The bank is based in Washington, D.C. and provided around $30 billion in loans and assistance to "developing" and transition countries in 2012. The bank's stated mission

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