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Jaclyn Williamson Jessica Phelan

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The International Monetary Fund (IMF) International organization that oversees the global

financial system by following the economic policies ofits 185 member nations

Particularly focuses on exchange rates, facilitatingdevelopment, reducing poverty, and globalcooperation.

Also offers financial and technical assistance to itsmembers using funds deposited with the IMF frommember nations

Last resort international lender

Not without stipulations

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Formally created in July 1944 during theUnited Nations Monetary and FinancialConference in Bretton Woods, NH

Finalized on December 27, 1945 when 29countries signed its Articles of Agreement

Headquarters is in Washington, DC

http://en.wikipedia.org/wiki/File:IMF_HQ.jpg

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Currently 185 members

Any country can apply for membership Quotas

A country can also withdraw from the IMFthough this is rare

Ex: Venezuela (still a member)

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Monetary unit for IMF and World Bank After collapse of Bretton Woods System

(1973), SDR redefined as a basket of fourcurrencies: Euro, Japanese yen, pound sterling, and U.S. dollar.

Calculated daily on the basis of exchangerates quoted at noon each day in the LondonMarket

Allocations: General Special One-Time SDRs

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1976 Great Britain Financial Crisis

Asian Financial Crisis of 1997

Current Economic Crisis

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Investors became concerned that the poundwas overvalued and that the governmentmight devalue A large scale sale of sterling ensued, which rapidly

lost value against the dollar Pound suffered from heavy inflation IMF issues$3.9 Billion Stipulations of Loan:

Heavy cuts in public expenditure (around a 20% cutin the budget deficit)

Improvement seen starting in 1977

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Thailand, Indonesia and Korea hit the hardest Key Issues:

Foreign investing, US, China, defaulting on debt,depreciation, and bankruptcies

IMF Rescue Packages

US$35 Billion from IMF

US$77 Billion raised from other countries

Temporary credit

Structural Adjustment Packages (SAPs)

Criticism

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Bankruptcy of Iceland in 2008 Pakistan approved by IMF for $874 million

loan Other countries with SBAs from the IMF:

Georgia, Ukraine, Hungary, Iceland, Latvia, Pakistan,Serbia, Belarus, and El Salvador

The SBA is designed to help countriesaddress short-term balance of payments

problems. The length of a SBA is typically 1224 months, Repayment is due within 3-5 years

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The United States is the biggest shareholderin the IMF, holding nearly 18% in shares, andthe IMF is generally considered a tool of theUS Treasury.

Criticism of bailouts

Conditions added onto loans (SAPs) Ex: Argentina

http://images.google.com/imgres?imgurl=http://www.celsias.com/blog/images/imf_world_bank_billions_poor.jpg&imgrefurl=http://www.celsias.com/article/imf-lies/&usg=__Fh8h7WH6DO_ApUhE0S_rIgJZcbg=&h=286&w=490&sz=35&hl=en&start=3&tbnid=6H0TVtwi6JvOkM:&tbnh=76&tbnw=130&prev=/images?q=bretton+woods+imf&gbv=2&hl=en

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The World Bank is a bank that providesassistance to developing countries with thegoal being to reducing poverty and aid intheir development.

Provides low-interest loans and interest-freecredits and grants to developing countries

Made up of two Development Institutions:

International Bank for Reconstruction andDevelopment (IBRD)

International Development Association (IDA).

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Formation: December 1945

Institutions: InternationalBank for Reconstructionand Development;

International DevelopmentAssociation

Membership: 185 Countries

President: Robert Zoellick

Headquarters: Washington, D.C.

http://en.wikipedia.org/wiki/File:Zoellick,_Robert_(official_portrait_2008).jpg

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The World Bank Group is not the same as theWorld Bank

Same President, Board of Directors, goals

The WBG includes the two institutions of theWorld Bank, and in addition consists of: International Finance Corporation (IFC)

Multilateral Investment Guarantee Agency (MIGA)

International Centre for Settlement of InvestmentDisputes (ICSID)

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Developed at the 1944 Bretton Woodsconference in Bretton Woods, NH

Originally, just the International Bank forReconstruction and Development was formed

First loans were for reconstruction of Europeafter World War II

After, the Bank focused attention on

developing countries Has loaned over $330 billion to developing

countries since its start

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Formed at the Bretton Woods Conference

Focuses its attention on middle-income andcreditworthy poorer countries as opposed todeveloping countries

Loans with low interest rates

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Established in 1960

Assists the worlds poorest countries

Interest-free credits and grants

Serves to complement the IBRD

Single largest source of donor funds for basicsocial service funds in developing countries

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There are 185 countries who are members in

the World Bank You must be a member of the IMF to be a member

of the World Bank The World Bank is run by the governments of

the member countries

There is one president, and Executive

Directors and a Board of Directors for eachinstitution

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Loans, Grants Korea

Millenium Development Goals

Poverty Reduction Strategies

Reconstruction after political conflicts

Most recent operations

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Structure

Corporate powers

Criticisms of formerPresident Paul Wolfowitz

Are they reallyreducing poverty?

Conditionalities

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McCallum, Bennett T. International Monetary Economics. New York:Oxford University Press, 1996.

The World Bank homepage: www.worldbank.org Head of World Bank Fraud Unit Resigns.Steven R. Weisman. New York

Times. (Late Edition (East Coast)). New York, N.Y.:Jan 17, 2008. pg. A.14 A World Bank without U.S. dominance; [Chicagoland Final Edition]

Kenneth Rogoff. Chicago Tribune. Chicago, Ill.: Apr 23, 2007. pg. 17 http://www.brettonwoodsproject.org/item.shtml?x=320869 http://www.imf.org/external/pubs/ft/exrp/differ/differ.htm http://www.twnside.org.sg/title/louder.htm www.imf.org http://news.yahoo.com/s/afp/20090330/wl_sthasia_afp/financeeco

nomyimfpakistanlead http://www.nytimes.com/2008/10/10/business/worldbusiness/10ic

ebank.html http://www.normangirvan.info/wp-content/uploads/2009/03/imf-crisis-loans-chart-twn-march-2009.doc

Buira, Ariel. The IMF and the World Bank at sixty. London: Anthem, 2005

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