PCACS(AUTONOMOUS)

ASSIGNMENT I

INTRODUCTION TO
FINANCIAL
MARKET
• INTERNATIONAL MONETARY FUNDS
• WORLD BANK
• WORLD TRADE ORGANIZATION
• BANK FOR INTERNATIONAL SETTLEMENTS

NAME: MUSKAN GUPTA.

ROLL NO: 714.
CLASS: FYFM.
 INTERNATIONAL MONETARY FUNDS (IMF)
• MEANING: IMF is an organization that works to Foster The Global Monetary Cooperation or to ensure the stability of
International Monetary System (IMS is a system of exchange rate & international payments).
• ESTABLISHED: 27 December 1945
• HEAD QUARTERS: Washington DC, USA
• TOTAL MEMBERS: 189 Members
• MANGING DIRECTOR: Kristalina Georgieva
• FINANCIAL YEAR: 1ST MAY TO 30TH APRIL
• HOW & WHY: The IMF, also known as the FUND, was conceived at a UN Conference in Bretton Woods, New
Hampshire, USA in July 1944.
 The 44 Countries build a framework for Economic Cooperation to avoid a repetition of the competitive devaluations that
had to contributed to The Great Depression of the 1930s and later the IMF played a part in shaping the Global Economy
since the end of World War II.
• ROLES PLAYED BY QUOTAS:
 SUBSCRIPTION: To Be Paid In 25 % (Any Weighted Currency) & 75 %(Own Currency)
 VOTING POWER: It Comprises In Basic Votes & +1 Vote On Each 1 Lakh SDR.
Fixed Number Of Basic Votes Are 5.502 %
Changes in the voting shares require approval by a super-majority of 85% of voting power.
 ACCESS TO FINANCING: Amount finance to a member is based on its Quota.
Can borrow- 145 % Annually & 435 % Cumulatively (Leaving The Exceptions).
• TOP 5 WEIGHTED CURRENCIES: US Dollars, Japanese Yen, British Pound, Euro And Chinese Yuan.
• QUOTAS & SDRs:
 For Quota, Each Member has to contribute through SDRs and Gold (& Currency).
 IMF provide loans to their Member Countries on the basis of their Payment Of Quotas.
 SDR(Special Drawing Rights) is an International Reserve Asset which is in UNIT.
 SDR is counted in the Daily Basis and Interest in counted on Weekly Basis.
• QUOTA FORMULA: Weighted Average Of GDP (Weight Of 50 %), Openness (30 %),
Economic Variability (15 %), & International Reserves (5 %).
• IMF & INDIA:
QUOTA: % OUT OF
MEMBER QUOTA: % OF NO. OF
RANK MILLIONS GOVERNOR ALTERNATE TOTAL
COUNTRY THE TOTAL VOTES
OF SDR VOTES
NIRMALA SHAKTIKANTA
8th INDIA 13,114.4 2.76 132,609 2.64
SITHARAMAN DAS

• TOP REPORTS PUBLISHED BY IMF:

 World Economic Outlook
 Regional Economic Report
 Global Financial Stability Report
 WORLD BANK (WB)
• MEANING:
 The world bank is an internationally supported bank that provides financial and technical assistance to developing
countries for development programs with the stated goal of reducing poverty.
 The World Bank (WB) provides low-interest loans, interest-free credit and grants to developing countries.
 These loans are for education, health, infrastructure, communications and many other purposes.
 The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing
countries.
 World Bank generally refers to just the IBRD and IDA.
• MOTTO: Working for a World Free of Poverty.
• ESTABLISHED: July 1944; 76 years ago.
• TYPE: Monetary International Financial Organization.
• PRESIDENT: David Malpass.
• MEMBERSHIP: 189 countries (IBRD) 173 countries (IDA)
• MIDDLE INCOME COUNTRIES (MICs):
 I. lower middle-income economies - those with a GNI per capita between $1,006 and $3,955
 II. upper middle-income economies - those with a GNI per capita between $3,956 and $12,235
• LOWER INCOME COUNTRIES (LICS): have a per capita income less than US $1,045 per year
• GOALS: The World Bank Group has set goals for the world to achieve by 2030:
 End extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3%.
 The WBG has focused its health sector investments and research in areas that are especially vital to helping countries
achieve UHC by 2030 by working closely with Donors, Development Partners, Governments, and The Private Sector.
• CORONAVIRUS RESPONSE IN 2020:
 The World Bank has been criticized for the slow response of its PANDEMIC FINANCING FACILITY (PEF), a fund
which was created to provide money to help manage pandemic outbreaks.
 Money will be released from the fund until 12 weeks after the outbreak was initially detected.
 It is however hoped that as the 2030 deadline for achieving the targets of goals.
 The World Bank will be a major player in making it a reality.
• WORLD BANK & INDIA:
 India is a member of four of the five constituents of the World Bank Group.
• THE WORLD BANK GROUP FIVE INSTITUTIONS:
1. The International Bank for Reconstruction and Development (IBRD)
2. The International Development Association (IDA)
3. The International Finance Corporation (IFC)
4. The Multilateral Investment Guarantee Agency (MIGA)
5. The International Centre for Settlement of Investment Disputes (ICSID)
 WORLD TRADE ORGANIZATION (WTO)

ESTABLISHED 1st January 1995

HEADQUATERS Centre William Rappard, Gevena, Switzerland
MEMBERSHIP 164 Member States
OBJECTIVE To supervise and liberalize international trade.
DIRECTOR Roberto Azevedo
NATURE OF OPERATION • It’s a negotiating forum;
• It’s a set of rules; &
• It helps to settle disputes.
GOVERNING BODIES • Council For Trade In Goods.
• Council For Trade-related Aspects Of Intellectual
Property Rights.
• Council For Trade In Services.
• Trade Negotiation Committee.
FORMED • Under the MARRAKESH AGREEMENT, signed
by 123 nations on 15th April 1994.
• It was replaced with GATT.
 • WTO & INDIA:
• India has been a WTO member since 1 January 1995 and a member of GATT since 8 July 1948.
• The WTO has both favorable and non-favorable impact on Indian economy.
Advantages Disadvantages
1.Increase in export earning: 1.TRIPS (Trade Related Aspects Of Intellectual Property):
i. Growth In Merchandise Export- Due to the reduction in tariff i. Pharmaceutical sector- Under trips agreement, product patents
and non-tariff trade barrier India's merchandise. will also be granted that will raise the prices of medicines, thus
ii. Growth In Service Exports- the WTO introduced the gats keeping them out of reach of the poor people.
(general agreement on trade in service) that proved beneficial for ii. Agriculture- The MNG, with their huge financial resources may
countries like India. also take over seed production and will eventually control food
production. These mills largely benefit MNCs.
2.Agriculture export: Due to the raise the price of agricultural 2.TRIMS (Trade Related Investment Measures): The agreement on
products in international market, India was in the form of higher trims also favours developing nations as there are no rules in the
export earning from agriculture. agreement to formulate international rules for controlling business
practices of foreign investors.
3. Textile and clothing: The phasing out of the MFA (multi fiber 3. GATS (General Agreement On Trade In Services): Foreign
arrangements) has helped India to increase the export of textile firms are allowed to remit their profits, dividends and royalties to
and clothing. their parent company, it will cause foreign exchange burden for
India.
4.Foreign direct investment: As per the TRIMS agreement, 4. GATT (General Agreement On Trade And Non-tariff Barriers):
restrictions on foreign investment has benefited developing Various Indian products have been hit by non-tariff barriers. These
countries by way of foreign direct investment, euro equities and include textiles, marine product, floriculture, pharmaceutical
portfolio investment. basmati rice, carpets, leather goods etc.
 BANK FOR INTERNATIONAL SETTLEMENTS (BIS)
• The Bank for International Settlements (BIS) is an INTERNATIONAL FINANCIAL INSTITUTION owned
by Central Bank that “fosters international monetary and financial cooperation and serves as a bank for central banks”
• BIS also provides banking services, but only to central banks and other international organizations.
• ESTABLISHED: 17 May 1930; 90 years ago.
• PURPOSE: Central Bank Cooperation.
• MEMBERSHIP: 62 Central Banks.
• GENERAL MANAGER: Agustin Carstens.
• MISSION: To serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in
those areas and to act as a bank for central banks.
• GOVERNANCE OF BIS:
 General Meeting of BIS member central banks
 BIS Boards of Directors
 BIS Management
• COMMITTEES:
 The Executive Committee
 The Finance Committee
 The Compliance and Operational Risk Committee
• ORGANIZATION & GOVERNMENT:
i. Monetary and Economic Department.
 Undertakes research and analysis to shape the understanding of policy issues concerning central banks, provides
committee support and organizes key meetings of senior central bankers and other officials in charge of financial stability.
In addition, the department collects, analyses and disseminates statistical information on the international financial system.
ii. Banking Department.
 Provides a range of financial services to support central banks in the management of their foreign exchange and gold
reserves and invests the equity of the BIS.
iii. General Secretariat.
 Provides the entire organization with comprehensive corporate services, including human resources, facilities
management, security, finance, communications and IT.

THANKYOU