International Monetary Fund - 1220 Words

The IMFs primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other. This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty. The Fund’s mandate has recently been clarified and updated to cover the full range of macroeconomic and financial sector issues that bear on global stability. The IMF was established at the Bretton Woods conference in 1944 to provide short term financial assistance to countries experiencing problems with their trade deficit or other Balance of Payments issues, so they could maintain stability in exchange†¦show more content†¦The IMF Board of Governors is composed of representatives of the 185 member countries. The Executive Board has 24 members that usually represent a coalition of like-minded countries in one representative. Lending decisions are made with consensus in a simple majority vote. Structural decisions require 60% majority where, G-5 countries collectively can nearly veto since they currently have 38% vote. Fundamental structural decisions e.g. changes in voting power require 85% majority; US has enough voting power to veto (gt;15%). Economic nationalists would say that the IMF voting structure enables powerful countries to promote their own national interests. Structuralists would say rich capitalist countries have the most voting power which is to the detriment of the developing countries. Embedded liberals would say that the type of conditions IMF imposes and the aid it provides helps troubled countries get back on track, stimulates their economy and gets the trade balance in equilibrium. In December 1997 the IMF announced a $57 billion loan package to bail South Korea out of its financial crisis accompanied by strict conditions. Some short term conditions were to reduce government spending, increase taxes and raise interest rates. Longer term structural reforms were also mandated: liberalizing foreign investment policies, opening domestic financial markets, implementing western lending standards, closing insolvent banks, reforming labor laws and reducing importShow MoreRelatedThe International Monetary Fund ( Imf )985 Words   |  4 PagesThe International Monetary Fund (IMF) was one of the many international organizations that emerged after the end of World War II. The primary function of the IMF is to promote the international financial stability and spur monetary cooperation. Many countries see the IMF as a â€Å"lender of last resort† (Thacker, 1999:38), meaning countries borrow money from the Fund for â€Å"short-term balance of payment support† (Steinwand and Stone, 2007:11) in order to avert the collapse of their domestic economies.Read MoreInternational Monetary Fund ( Imf )2266 Words   |  10 PagesAims/Purpose International Monetary Fund (IMF) aims to maintain and defeat and sometimes to restrain the financial crises. (BBC, 2012) Basically it was created to avoid another Great Depression with an economical cooperation. It was founded more than 60 years ago at the end of the II World War. (International Monetary Fund, 2015) Mostly the institution has directed to focus the developing world. Nowadays there are few purposes of the IMF such as monetary stability, exchange rate stability, facilitateRead More International Monetary Fund Essay2125 Words   |  9 PagesInternational Monetary Fund Intro: In July 1944, the United Nations Monetary and Financial Conference met in Bretton Woods, New Hampshire, to find a way to rebuild and stabilize the world economy that had been severely devastated by World War II. One result of the conference was the founding of the International Monetary Fund (IMF) through the signing of its Articles of Agreement by 29 countries. The stated purposes of the IMF were to create international monetary cooperation, toRead MoreInternational Monetary Fund ( Imf )3071 Words   |  13 PagesGLOBAL BUSINESS SUSTAINABILITY INTRODUCTION International Monetary Fund (IMF) is an organization consisting of 188 nations functioning towards global monetary cooperation, ensuring financial stability, minimizing poverty around the world (IMF, 2014). 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IMF provides short term loans to countries having problems of balance of payments. It also provides technical advice to its members and ensures free flow of trade by removing all trade restrictions. It establishes and maintains stable exchange rate between member countriesRead MoreThe World Bank And The International Monetary Fund1505 Words   |  7 PagesEconomics in an International Context Essay Name: Yousef Al Zarafy Module Code: FC006 - Economics in an International Context Module Teacher: Georgina Chapman Assessment Type: Individual Essay Assessment Title: â€Å"Africa needs to be rich - rather than green† claims Matt Ridley. Would this statement also apply to developing economies? Using clear Example, discuss the role and influence of The World Bank and the International Monetary Fund in the developing countries of Europe. 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The IMF operates as a United Nations specialized agency and is a permanent forum for consideration of issues of international payments, in which member nations are encouraged to maintain an orderly pattern of exchange rates and to avoid restrictive exchange practices.