The International Monetary Fund (IMF)
The International Monetary Fund (IMF) based in Washington, D.C., was established in 1945. The IMF was established in order to oversee the gold exchange standard system of fixed exchange rates, and provide advice and financing to countries experiencing acute balance of payments crises. When the Bretton Woods system of fixed exchange rates broke down in 1971-73, the IMF evolved into a lender of last resort to countries facing macroeconomic and financial crises, and has been involved in many episodes including those of the Latin American debt crisis of 1980s, the Mexican Peso crisis of 1994, The South East Asian and Russian crises of 1997 and1998, the Turkish crisis in 2001 and the Argentinean collapse of 2002. More recently, it has become increasingly involved with debt problems of developing countries. The IMF has often come under criticism for the conditionality of its support to member countries. Although it has not always been prefect in its recommendations, the problems it has been called upon to solve originated with unsound economic but populist entitlement policies that governments have offered their population to buy their vote. When these policies fail, governments are powerless to go back on their word and solve the problems they have created and they blame the international investment community and capitalists for their ills. When their financial systems collapse, then they carry out the necessary reforms under the excuse that they are imposed on them from the IMF in exchange for the badly needed financing.
The World Bank (WB)
The World Bank (WB), based in Washington, D.C, established in 1946. The World Bank has three main branches: the International Bank for Reconstruction and Development (IBRD), the International Development Agency (IDA) and the International Finance Corporation (IFC). It aims to promote economic development in the world’s poorer countries through technical advice, project financing, long-term lending at rates below market interest rates averaging around $30 billion a year and spread over 100 countries.
The World Trade Organization (WTO)
The World Trade Organization (WTO), based in Geneva, established in 1995, that has succeeded the General Agreement on Tariffs and Trade (GAAT), based in Geneva, established in 1995. The WTO was established following the Uruguay Round of multilateral trade negotiations, that were concluded in 1993. This organization should have come to life in the 1940s along with the other two, under the name International Trade Organization (ITO). The US Congress failed to ratify the agreement so the organization never came to life, rather the less formal Secretariat of the GATT was created instead. The WTO is the institution that governs international trade, setting international standards and the rules of trade. Started with 132 members it now has 150 following the admission of Vietnam in January 2006.
The Bank for International Settlements (BIS)
The Bank for International Settlements (BIS) was established in 1930, is based in Basel, Switzerland and serves as a bank for central banks and international organizations. The BIS is the oldest international financial organization established originally following the end of the First World War to facilitate the war reparations payments of Germany. In addition to being a clearing house for central banks, the BIS conducts research and facilitates the coordination of central bank policies and standards. The BIS is the author of the 1988 Basel Capital Accord and the Basel II revision. These accords establish minimum risk adjusted capital adequacy requirements (Tier I and Tier II capital) that internationally active banks should follow to reduce the risk of bank failures and enhance the resilience of the global banking system.
