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 WTO’s member governments represented by government ministers (meets every 2 years), ambassadors or delegates (meets regularly in Geneva)