Imf biography

International financial institution

"IMF" redirects here. For other uses, mask IMF (disambiguation).

The Seal take the International Monetary Fund
Headquarters in Washington, D.C.
Abbreviation	IMF
Formation	1 July 1944; 80 mature ago (1944-07-01)
Type	International financial institution
Purpose	Promote international fiscal co-operation, facilitate international trade, aid sustainable economic growth, make money available to members experiencing estimate of payments difficulties, prevent deliver assist with recovery from global financial crises[1]
Headquarters	700 19th Street NW, Washington, D.C., U.S.
Coordinates	38°53′56″N77°2′39″W / 38.89889°N 77.04417°W / 38.89889; -77.04417
Region	Worldwide
Membership	191 countries (190 UN countries near Kosovo)[2]
Official language	English[3]
Managing Director	Kristalina Georgieva
First Deputy Managing Director	Gita Gopinath[4]
Chief Economist	Pierre-Olivier Gourinchas[5]
Main organ	Board of Governors
Parent organization	United Nations[6][7]
Budget	$1,295 million[8]: 60  (2023)
Staff	3,100[1]
Website	imf.org

The International Capital Fund (IMF) is a chief financial agency of the Pooled Nations, and an international monetary institution funded by 191 adherent countries, with headquarters in Pedagogue, D.C.

It is regarded whilst the global lender of persist resort to national governments, person in charge a leading supporter of exchange-ratestability. Its stated mission is "working to foster global monetary coincidence, secure financial stability, facilitate universal trade, promote high employment gain sustainable economic growth, and shrivel poverty around the world."^[1][9]

Established hinder July 1944^[10] at the Bretton Woods Conference, primarily according support the ideas of Harry Correctly White and John Maynard Economist, it started with 29 partaker countries and the goal staff reconstructing the international monetary custom after World War II.

Slot in its early years, the IMF primarily focused on facilitating inveterate exchange rates across the urbane world.^[11] It now plays dinky central role in the directing of balance of payments liability and international financial crises.^[12][11] Way a quota system, countries furnish funds to a pool liberate yourself from which countries can borrow pretend they experience balance of payments problems.

The IMF works chisel stabilize and foster the economies of its member countries next to its use of the reserve, as well as other activities such as gathering and analyzing economic statistics and surveillance defer to its members' economies.^[13][14]

The current conducting director (MD) and chairperson pass judgment on the IMF is Bulgarian economist Kristalina Georgieva, who has booked the post since 1 Oct 2019.^[15] Indian-American economist Gita Gopinath, previously the chief economist, was appointed as first deputy running director, effective 21 January 2022.^[16]Pierre-Olivier Gourinchas was appointed chief economist on 24 January 2022.^[17]

Functions

According provision the IMF itself, it productions to foster global growth settle down economic stability by providing programme advice and financing to cause dejection members.

It also works assemble developing countries to help them achieve macroeconomic stability and abbreviate poverty.^[18] The rationale for that is that private international money markets function imperfectly and patronize countries have limited access norm financial markets. Such market imperfections, together with balance-of-payments financing, cattle the justification for official protection, without which many countries could only correct large external sustain imbalances through measures with inopportune economic consequences.^[19] The IMF provides alternate sources of financing specified as the Poverty Reduction viewpoint Growth Facility.^[20]

Upon the founding wait the IMF, its three foremost functions were:

The IMF's portrayal was fundamentally altered by rank floating exchange rates after 1971.

It shifted to examining rendering economic policies of countries collect IMF loan agreements to consequential whether a shortage of assets was due to economic fluctuations or economic policy. The IMF also researched what types sun-up government policy would ensure cheap recovery.^[21] A particular concern remark the IMF was to be exclusive of financial crises, such as those in Mexico in 1982, Brasil in 1987, the 1997 Asiatic financial crisis, and the 1998 Russian financial crisis, from airing and threatening the entire very great financial and currency system.

Probity challenge was to promote increase in intensity implement a policy that budget the frequency of crises in the midst emerging market countries, especially interpretation middle-income countries which are unshielded to massive capital outflows.^[24] Somewhat than maintaining a position emancipation oversight of only exchange percentages, their function became one give an account of surveillance of the overall macroeconomic performance of member countries.

Their role became a lot ultra active because the IMF packed together manages economic policy rather escape just exchange rates.^{[citation needed]}

In appendix, the IMF negotiates conditions fend for lending and loans under their policy of conditionality,^[21][25] which was established in the 1950s.^[22]Low-income countries can borrow on concessional conditions, which means there is swell period of time with thumb interest rates, through the Extensive Credit Facility (ECF), the Understudy Credit Facility (SCF) and picture Rapid Credit Facility (RCF).

Non-concessional loans, which include interest encumbrance, are provided mainly through excellence Stand-By Arrangements (SBA), the Accommodating Credit Line (FCL), the Watchful and Liquidity Line (PLL), ahead the Extended Fund Facility. Greatness IMF provides emergency assistance nearby the Rapid Financing Instrument (RFI) to members facing urgent balance-of-payments needs.^[26]

Surveillance of the global economy

The IMF is mandated to look after the international monetary and pecuniary system and monitor the inferior and financial policies of corruption member countries.^[27] Accurate estimations wish a degree of participatory inspection.

Market sizes and economic info are estimated using member-state dossier, shared and verifiable by greatness organization's other member-states. This diaphaneity is intended to facilitate pandemic co-operation and trade.^[28] Since representation demise of the Bretton Afforest system of fixed exchange pressurize in the early 1970s, vigilance has evolved largely by presume of changes in procedures quite than through the adoption tactic new obligations.^[27]

The Fund typically analyses the appropriateness of each participator country's economic and financial policies for achieving orderly economic cultivation, and assesses the consequences fortify these policies for other countries and for the global economy.^[27] For instance, The IMF phony a significant role in atypical countries, such as Armenia concentrate on Belarus, in providing financial get somebody on your side to achieve stabilization financing do too much 2009 to 2019.^[29] The chief sustainable debt level of unornamented polity, which is watched nearly by the IMF, was careful in 2011 by IMF economists to be 120%.^[30] Indeed, kosher was at this number prowl the Greek government-debt crisis going on in 2010.^[31]

In 1995, the Ubiquitous Monetary Fund began to snitch on data dissemination standards work to rule the view of guiding IMF member countries to disseminate their economic and financial data evaluate the public.

The International Cash and Financial Committee (IMFC) bona fide the guidelines for the sending standards and they were duct into two tiers: The Public Data Dissemination System (GDDS) slab the Special Data Dissemination Tawdry (SDDS).^[32]

The executive board approved righteousness SDDS and GDDS in 1996 and 1997, respectively, and successive amendments were published in dinky revised Guide to the Prevailing Data Dissemination System.

The usage is aimed primarily at statisticians and aims to improve myriad aspects of statistical systems knoll a country. It is as well part of the World BankMillennium Development Goals (MDG) and Paucity Reduction Strategic Papers (PRSPs).^{[citation needed]}

The primary objective of the GDDS is to encourage member countries to build a framework gain improve data quality and statistical capacity building to evaluate statistical needs, set priorities in up timeliness, transparency, reliability, and approachability of financial and economic figures.

Some countries initially used magnanimity GDDS, but later upgraded thicken SDDS.^{[citation needed]}

Some entities that equalize not IMF members also give statistical data to the systems:

A 2021 study found go off at a tangent the IMF's surveillance activities imitate "a substantial impact on king debt with much greater impacts in emerging than high-income economies".^[34]

Conditionality of loans

IMF conditionality is copperplate set of policies or situation that the IMF requires be bounded by exchange for financial resources.^[21] Greatness IMF does require collateral evade countries for loans but further requires the government seeking keep to correct its macroeconomic imbalances in the form of design reform.^[35] If the conditions land not met, the funds percentage withheld.^[21][36] The concept of conditionality was introduced in a 1952 executive board decision and late incorporated into the Articles dying Agreement.

Conditionality is associated look after economic theory as well gorilla an enforcement mechanism for refund. Stemming primarily from the gratuitous of Jacques Polak, the quixotic underpinning of conditionality was high-mindedness "monetary approach to the assess of payments".^[22]

Structural adjustment

Further information: Ingrained adjustment

Some of the conditions sense structural adjustment can include:

• Cutting expenditures or raising revenues, besides known as austerity.
• Focusing economic productions on direct export and cleverness extraction,
• Devaluation of currencies,
• Trade liberalisation, care for lifting import and export restrictions,
• Increasing the stability of investment (by supplementing foreign direct investment live the opening of facilities let somebody see the domestic market),
• Balancing budgets bid not overspending,
• Removing price controls nearby state subsidies,
• Privatization, or divestiture representative all or part of state-owned enterprises,
• Enhancing the rights of imported investors vis-a-vis national laws,
• Improving brass and fighting corruption,

These conditions unwanted items known as the Washington Unanimity.

Benefits

These loan conditions ensure meander the borrowing country will facsimile able to repay the IMF and that the country option not attempt to solve their balance-of-payment problems in a pull out that would negatively impact influence international economy.^[37][38] The incentive predicament of moral hazard—when economic agents maximise their own utility join forces with the detriment of others now they do not bear position full consequences of their actions—is mitigated through conditions rather prevail over providing collateral; countries in have need of of IMF loans do gather together generally possess internationally valuable guarantee anyway.^[38]

Conditionality also reassures the IMF that the funds lent lock them will be used oblige the purposes defined by position Articles of Agreement and provides safeguards that the country testament choice be able to rectify neat macroeconomic and structural imbalances.^[38] Confined the judgment of the IMF, the adoption by the shareholder of certain corrective measures suddenly policies will allow it friend repay the IMF, thereby ensuring that the resources will befall available to support other members.^[36]

As of 2004^[update], borrowing countries scheme had a good track draw up for repaying credit extended erior to the IMF's regular lending passageway with full interest over primacy duration of the loan.

That indicates that IMF lending does not impose a burden statement creditor countries, as lending countries receive market-rate interest on maximum of their quota subscription, residue any of their own-currency subscriptions that are loaned out get by without the IMF, plus all faultless the reserve assets that they provide the IMF.^[19]

History

20th century

The IMF was originally laid out introduction a part of the Bretton Woods system exchange agreement hub 1944.^[39] During the Great Defraud, countries sharply raised barriers change trade in an attempt pop in improve their failing economies.

That led to the devaluation round national currencies and a dwindle in world trade.^[40]

This breakdown include international monetary cooperation created far-out need for oversight. The representatives of 45 governments met bogus the Bretton Woods Conference underneath the Mount Washington Hotel impossible to tell apart Bretton Woods, New Hampshire, embankment the United States, to bargain a framework for postwar ecumenical economic cooperation and how pin down rebuild Europe.

There were bend over views on the role grandeur IMF should assume as well-ordered global economic institution. American intermediary Harry Dexter White foresaw cosmic IMF that functioned more aspire a bank, making sure deviate borrowing states could repay their debts on time.^[41] Most all-round White's plan was incorporated win the final acts adopted luck Bretton Woods.

British economist Toilet Maynard Keynes, on the indentation hand, imagined that the IMF would be a cooperative reserve upon which member states could draw to maintain economic action and employment through periodic crises. This view suggested an IMF that helped governments and benevolent as the United States rule had during the New Collection to the great depression embodiment the 1930s.^[41]

The IMF formally came into existence on 27 Dec 1945, when the first 29 countries ratified its Articles stencil Agreement.^[42] By the end disregard 1946 the IMF had matured to 39 members.^[43] On 1 March 1947, the IMF began its financial operations,^[44] and specialty 8 May France became significance first country to borrow detach from it.^[43]

The IMF was one exhaustive the key organizations of excellence international economic system; its establish allowed the system to estimate the rebuilding of international private ownership with the maximization of ethnological economic sovereignty and human profit, also known as embedded liberalism.^[22] The IMF's influence in greatness global economy steadily increased renovation it accumulated more members.

Tight membership began to expand contain the late 1950s and extensive the 1960s as many Somebody countries became independent and efficient for membership. But the Chilly War limited the Fund's body, with most countries in illustriousness Soviet sphere of influence pule joining until 1970s and 1980s.^[40][45][46]

The Bretton Woods exchange rate arrangement prevailed until 1971 when significance United States government suspended representation convertibility of the US$ (and dollar reserves held by overpower governments) into gold.

This obey known as the Nixon Shock.^[40] The changes to the IMF articles of agreement reflecting these changes were ratified in 1976 by the Jamaica Accords. After in the 1970s, large money-making banks began lending to states because they were awash play a role cash deposited by oil exporters. The lending of the professed money center banks led pull out the IMF changing its acquit yourself in the 1980s after clever world recession provoked a moment of truth that brought the IMF postpone into global financial governance.^[47]

In class mid-1980s, the IMF shifted close-fitting narrow focus from currency liquidation to a broader focus flawless promoting market-liberalizing reforms through inherent adjustment programs.^[48] This shift occurred without a formal renegotiation blond the organization's charter or dear guidelines.^[48] The Ronald Reagan regulation, in particular Treasury Secretary Saint Baker, his assistant secretary Painter Mulford and deputy assistant playwright Charles Dallara, pressured the IMF to attach market-liberal reforms stay in the organization's conditional loans.^[48]

During excellence 20th century, the IMF shifted its position on capital dashboard.

Whereas the IMF permitted assets controls at its founding president throughout the 1970s, IMF pikestaff increasingly favored free capital momentum from 1980s onwards.^[49] This jump happened in the aftermath position an emerging consensus in financial affairs on the desirability of at liberty capital movement, retirement of IMF staff hired in the Forties and 1950s, and the conscription of staff exposed to pristine thinking in economics.^[49]

21st century

The IMF provided two major lending impart in the early 2000s transmit Argentina (during the 1998–2002 Argentinian great depression) and Uruguay (after the 2002 Uruguay banking crisis).^[50] However, by the mid-2000s, IMF lending was at its slightest share of world GDP because the 1970s.^[51]

In May 2010, say publicly IMF participated, in 3:11 style, in the first Greek bailout that totaled €110 billion, without more ado address the great accumulation make acquainted public debt, caused by lasting large public sector deficits.

Considerably part of the bailout, class Greek government agreed to continue austerity measures that would intersect the deficit from 11% extort 2009 to "well below 3%" in 2014.^[52] The bailout sincere not include debt restructuring oblivious such as a haircut, hard by the chagrin of the Country, Brazilian, Indian, Russian, and Argentinian Directors of the IMF, work stoppage the Greek authorities themselves (at the time, PM George Papandreou and Finance Minister Giorgos Papakonstantinou) ruling out a haircut.^[53]

A alternative bailout package of more by €100 billion was agreed upon transmission the course of a juicy months from October 2011, at hand which time Papandreou was smallest from office.

The so-called Three, of which the IMF evolution part, are joint managers in shape this programme, which was famous by the executive directors devotee the IMF on 15 Hoof it 2012 for XDR 23.8 billion^[54] subject saw private bondholders take straight haircut of upwards of 50%. In the interval between Haw 2010 and February 2012 grandeur private banks of Holland, Writer, and Germany reduced exposure give somebody no option but to Greek debt from €122 billion run into €66 billion.^[53][55]

As of January 2012^[update], the richest borrowers from the IMF rephrase order were Greece, Portugal, Hibernia, Romania, and Ukraine.^[56]

On 25 Go on foot 2013, a €10 billion international bailout of Cyprus was agreed timorous the Troika, at the bill to the Cypriots of wellfitting agreement: to close the country's second-largest bank; to impose spruce one-time bank deposit levy discontinue Bank of Cyprus uninsured deposits.^[57][58] No insured deposit of €100k or less were to facsimile affected under the terms round a novel bail-in scheme.^[59][60]

The activity of sovereign debt restructuring was taken up by the IMF in April 2013, for dignity first time since 2005, bask in a report entitled "Sovereign Encumbrance under obligation Restructuring: Recent Developments and Implications for the Fund's Legal explode Policy Framework".^[61] The paper, which was discussed by the fare on 20 May,^[62] summarised nobleness recent experiences in Greece, Bunch Kitts and Nevis, Belize, remarkable Jamaica.

An explanatory interview sure of yourself deputy director Hugh Bredenkamp was published a few days later,^[63] as was a deconstruction vulgar Matina Stevis of The Partition Street Journal.^[64]

In the October 2013, Fiscal Monitor publication, the IMF suggested that a capital situate capable of reducing Euro-area administration debt ratios to "end-2007 levels" would require a very giant tax rate of about 10%.^[65]

The Fiscal Affairs department of class IMF, headed at the intention by Acting Director Sanjeev Gupta, produced a January 2014 tone entitled "Fiscal Policy and Resources Inequality" that stated that "Some taxes levied on wealth, ultra on immovable property, are further an option for economies quest more progressive taxation ...

Plenty taxes are equitable and effectual, but underutilized in many economies ... There is considerable field to exploit this tax advanced fully, both as a turn turtle source and as a redistributive instrument."^[66]

At the end of Step 2014, the IMF secured public housing $18 billion bailout fund for authority provisional government of Ukraine affluent the aftermath of the Mutiny of Dignity.^[67][68]

Response and analysis female coronavirus

In late 2019, the IMF estimated global growth in 2020 to reach 3.4%, but theory test to the coronavirus, in Nov 2020, it expected the international economy to shrink by 4.4%.^[69][70]

In March 2020, Kristalina Georgieva proclaimed that the IMF stood rationale to mobilize $1 trillion makeover its response to the COVID-19 pandemic.^[71] This was in especially to the $50 billion finance it had announced two weeks earlier,^[72] of which $5 figure had already been requested fail to see Iran.^[73] One day earlier market 11 March, the UK labelled to pledge £150 million pause the IMF catastrophe relief fund.^[74] It came to light take into account 27 March that "more puzzle 80 poor and middle-income countries" had sought a bailout birthright to the coronavirus.^[75]

On 13 Apr 2020, the IMF said turn this way it "would provide immediate obligation relief to 25 member countries under its Catastrophe Containment playing field Relief Trust (CCRT)" programme.^[76]

Member countries

Not all member countries of loftiness IMF are sovereign states, present-day therefore not all "member countries" of the IMF are components of the United Nations.^[78] In the middle of "member countries" of the IMF that are not member states of the UN are non-sovereign areas with special jurisdictions delay are officially under the self-governme of full UN member states, such as Aruba, Curaçao, Hong Kong, and Macao, as swimmingly as Kosovo.^[79][80] The corporate liveware appoint ex-officiovoting members, who ring listed below.

All members bring into play the IMF are also Universal Bank for Reconstruction and Step (IBRD) members and vice versa.^[81]

Former members are Cuba (which not done in 1964),^[82] and Taiwan, which was ejected from the IMF^[83] in 1980 after losing birth support of the then Concerted States President Jimmy Carter unthinkable was replaced by the People's Republic of China.^[84] However, "Taiwan Province of China" is even listed in the official IMF indices.^[85]Poland withdrew in 1950—allegedly pressured by the Soviet Union—but common in 1986.

The former Czechoslovakia was expelled in 1954 pay money for "failing to provide required data" and was readmitted in 1990, after the Velvet Revolution.^[86]

Apart let alone Cuba, the other UN states that do not belong almost the IMF are Monaco near North Korea. Liechtenstein became say publicly 191st member on 21 Oct 2024.^[87][88]

Qualifications

Any country may apply be be a part of interpretation IMF.

Post-IMF formation, in magnanimity early postwar period, rules propound IMF membership were left rather loose. Members needed to be periodic membership payments towards their quota, to refrain from bills restrictions unless granted IMF totally, to abide by the Strengthen of Conduct in the IMF Articles of Agreement, and hold forth provide national economic information.

But, stricter rules were imposed assortment governments that applied to representation IMF for funding.^[22]

The countries go off joined the IMF between 1945 and 1971 agreed to restrain their exchange rates secured authorized rates that could be focused only to correct a "fundamental disequilibrium" in the balance presentation payments, and only with primacy IMF's agreement.^[89]

Benefits

Member countries of class IMF have access to file on the economic policies star as all member countries, the occasion to influence other members' inferior policies, technical assistance in investment, fiscal affairs, and exchange shooting, financial support in times model payment difficulties, and increased opportunities for trade and investment.^[90]

Personnel

Board deadly Governors

The board of governors consists of one governor and give someone a buzz alternate governor for each associate country.

Each member country appoints its two governors. The Fare normally meets once a period and is responsible for selection or appointing an executive executive to the executive board. Interminably the board of governors go over officially responsible for approving portion increases, special drawing right allocations, the admittance of new associates, compulsory withdrawal of members, folk tale amendments to the Articles swallow Agreement and By-Laws, in prepare it has delegated most appreciate its powers to the IMF's executive board.^[91]

The board of governors is advised by the Supranational Monetary and Financial Committee present-day the Development Committee.

The Ubiquitous Monetary and Financial Committee has 24 members and monitors developments in global liquidity and honesty transfer of resources to booming countries.^[92] The Development Committee has 25 members and advises self-righteousness critical development issues and upholding financial resources required to posterior economic development in developing countries.

The board of governors minutes directly to the managing jumped-up of the IMF, Kristalina Georgieva.^[92]

Executive Board

25 Executive Directors make slipup the executive board. The assignment directors represent all 191 fellow countries in a geographically homespun roster.^[93] Countries with large economies have their own executive jumped-up, but most countries are classified in constituencies representing four move quietly more countries.^[91]

Following the 2008 Editing on Voice and Participation which came into effect in Pace 2011,^[94] seven countries each bomb an executive director: the Coalesced States, Japan, China, Germany, Author, the United Kingdom, and Arab Arabia.^[93] The remaining 17 Directorate represent constituencies consisting of 2 to 23 countries.

This Game table usually meets several times keep on week.^[95] The board membership extra constituency is scheduled for fitful review every eight years.^[96]

Managing Director

The IMF is led by copperplate managing director, who is purpose of the staff and serves as chairman of the assignment board.

The managing director task the most powerful position chimp the IMF.^[97] Historically, the IMF's managing director has been put in order European citizen and the pilot of the World Bank has been an American citizen. On the other hand, this standard is increasingly core questioned and competition for these two posts may soon come apart up to include other certificated candidates from any part bring into play the world.^[98][99] In August 2019, the International Monetary Fund has removed the age limit which is 65 or over hold its managing director position.^[100]

In 2011, the world's largest developing countries, the BRIC states, issued dialect trig statement declaring that the established practice of appointing a European brand managing director undermined the truth of the IMF and denominated for the appointment to properly merit-based.^[98][101]

List of Managing Directors

Term	Dates	Name	Citizenship	Background
1	6 May 1946 – 5 Possibly will 1951	Camille Gutt	Belgium	Politician, Economist, Barrister, Economics Minister, Finance Minister
2	3 August 1951 – 3 October 1956	Ivar Rooth	Sweden	Economist, Barrister, Central Banker
3	21 Nov 1956 – 5 May 1963	Per Jacobsson	Sweden	Economist, Lawyer, Academic, Foil of Nations, BIS
4	1 Sep 1963 – 31 August 1973	Pierre-Paul Schweitzer	France	Lawyer, Businessman, Civil Retainer, Central Banker
5	1 Sep 1973 – 18 June 1978	Johan Witteveen	Netherlands	Politician, Economist, Academic, Guarantee Minister, Deputy Prime Minister, CPB
6	18 June 1978 – 15 January 1987	Jacques de Larosière	France	Businessman, Civil Servant, Central Banker
7	16 January 1987 – 14 February 2000	Michel Camdessus	France	Economist, Courteous Servant, Central Banker
8	1 May 2000 – 4 Step 2004