International Monetary Fund - guarantor of global financial stability

Among other "gifts" of the Bretton Woods system, the International Monetary Fund was established in 1944, playing an important role in the modern world. The attitude to this organization among the participating countries and world analysts is very ambiguous, and in order to understand what place it occupies in the financial system of the world, it should be carefully studied.

The objectives and functions of the International Monetary Fund

Created in the period of active military operations on the margins of the Second World War, the International Monetary Fund Was called upon to restore and strengthen the economies of countries after its completion. A huge contribution to the creation of this organization was made by British economist J.M. Keynes and US Press Secretary G.D. White, who developed a base for the prevention of economic crises arising from the use of devaluations.

To date, the International Monetary Fund is a specialized financial and credit organization, of which 184 countries are members. In order to understand why this foundation was created, it is enough just to list its main goals:

1. Regulation of balanced growth of the economy;
2. Maintaining a stable exchange rate ;
3. Prevention of so-called. "Competitive devaluation";
4. The provision of monetary and advisory assistance in resolving the problems of the balance of payments of a particular state.

To implement them, the World Monetary Fund actually carries out the following actions:

• Monitors the financial activities of Member States;
• On the basis of the data obtained, develop recommendations on the elimination of shortcomings and the prevention of violations in the existing system of financial management;
• If necessary, offers technical assistance by training highly qualified personnel in the field of economic management;
• Provides loans.

The latter is by far the most important function, because Together with the receipt of funds, the debtor country will be obliged to implement all recommendations for optimizing the state budget.

International Monetary Fund - structure and financing

For an organization that includes most of the world's countries, a governance structure is quite characteristic. The Governing Council occupies a special place in it. The purpose of his work is to develop tactics to resolve the problems that are brewing or already existing. But the direct implementation of decisions taken by the Board of Management falls directly on the Executive Committee. This body consists of 24 members, eight of which are permanent, and 16 operate on a rotational principle every two years.

Also, the World Monetary Fund has two major committees - the International Monetary and Financial (IMFC) and the Development Committee. The former considers issues related only to the state of the foreign exchange market (see Goals 2 and 3), while the latter is focusing its efforts on helping developing countries. And the latter, it is worth noting, is a joint body with another brainchild of the Bretton Woods system - the International Bank.

To finance the activities of the organization in question, a special quota system was created, based on special rights of borrowing so-called. An international reserve asset, which provided a departure from the gold standard. The second source of financing activities were loans received under the General Loan Agreements and the New Loan Agreements. All funds received by the International Monetary Fund are cash loans received from state banks of strictly specified countries and financial institutions in Switzerland. These sources of funding can effectively redistribute cash flows, thereby ensuring the fulfillment of the goals of this financial institution.

Today, the International Monetary Fund is a powerful financial institution capable, through its bodies and powers given to it, to effectively influence the economic situation in virtually any country that is a member of it.