Lecture 10: Global Financial Institutions

Institutions

have different roles to stabilize financial markets (WB, IMF, WTO)

Bretton Woods Conference

IMF and WB emerged from UN Monetary and Financial Conference in Bretton Woods, New Hampshire (July 1944) to maintain economic growth post WW2; goal is to agree on a new framework for the international monetary system to maintain cooperation amongst nations

International Monetary Fund

fixed exchange rate; tied value to dollar, which is pegged to one ounce of gold for 35 dollars

International Monetary Fund

provides short term loans for in-debt countries, keeps tabs on global economy, establishes economic policies in member countries, and fights financial crises

International Monetary Fund

maintains global macroeconomic and financial stability that helps countries to build strong economies by promoting monetary cooperation between countries, and providing policy advise and assisting capacity development

International Monetary Fund

uses 30% of its budget for capacity development to make countries self-reliant, and low income countries can borrow on induced terms, currently 0% interest rates

World Bank

provides financial assistance (rebuilt France, UK, Germany), reducing poverty by funding and resources in projects for poorest countries in the world

World Bank

provides long term economic development, loans, and funded through bond issuances & country contributions

World Bank

provides technical and financial support to countries and implements specific developments like building schools and health centers, providing water and electricity, fighting disease, and protecting the environment

World Trade Organization

formerly known as GATT, it is the global rules of trade that ensures that trade flows and trade disputes of 160 members representing 98% of world trade is settled smoothly

World Trade Organization

runs a global system of trade rules, acts as a forum for negotiating trade agreements, settles trade disputes between its members, and supports the needs of developing countries

World Trade Organization

major decisions are made by WTOs member governments represented by government ministers (meets every 2 years), ambassadors or delegates (meets regularly in Geneva)