CHAPTER 16

INTERNATIONAL
INSTITUTIONS
 LEARNING OBJECTIVES
 To learn about the origins of the World Bank
and International Monetary Fund
 To understand international monetary and
financial systems and its constituents
 To discuss the purpose, structure, and
governance of international financial
institutions
 To describe the procedure of lending by
different international financial institutions

1-2
International Institutions
 International financial institutions are the
international organisations that give loans to
governments for large-scale projects on the
condition that they increase the economic
growth.
 The main aim of setting up these institutions
is to promote the economic growth and to
reduce any depressions in the economy

1-3
International organisations
 Economic and Trade Organisation
 Financial Organisation

1-4
Evolution of International
Monetary and Financial Systems
I. The Gold Standard (1880–1913)
II. The Interim Years (1914–1944)
III. Bretton Woods (1945–1971)

1-5
International
Financial Institutions (IFIs)
 The objectives of IFIs
 poverty alleviation,
 Economic
 growth, and protection of the environment

1-6
IMF
 The IMF is an inter-governmental
organisation to promote international
monetary cooperation, exchange stability,
and orderly exchange arrangements.

1-7
Main Functions of IMF
 Surveillance
 Lending
 Technical Assistance

1-8
Governance of IMF
 Board of Governors
 Ministerial Committees
 The Executive Board

1-9
World Bank
 The World Bank was created to lend to
primarily European countries that had been
destroyed in the war to help them rebuild
their economies.
 It evolved from the International Bank for
Reconstruction and Development (IBRD).
 The World Bank derives its support from 180
member nations and pitches bond offerings
to the world’s capital markets.
1-10
Objectives of World bank
1. to help member states to reconstruct and
develop by facilitating capital investment;
2. to promote foreign private investment; and
3. to promote the long-range balanced growth
of international trade and the maintenance
of equilibrium in balances of payments.

1-11
Main Functions of World Bank
 Lending
 Development Strategy
 Financial Services
 Data Collection

1-12
Principal Operating Units of
World Bank
 International Bank for Reconstruction and
Development (IBRD)
 International Financial Corporation (IFC)
 International Development Association (IDA)
 Multilateral Investment Guarantee Agency
(MIGA)
 International Centre for Settlement of
Investment Disputes (ICSID)

1-13