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INTERNATIONAL MONETARY FUND

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by

Phil Yoo

on 17 December 2013

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Transcript of INTERNATIONAL MONETARY FUND

EUROPEAN CENTRAL BANK
BY
INTERNATIONAL MONETARY FUND
Tan Qian Fan (Fiona)
Oriane Mabille
Nick Richardson Piriz
Paul Junsung Kim
Phillip Yoo

MEMBER COUNTRIES
The IMF currently has 188 members.

originally IMF had 30 members

South Sudan 2012
Policies incremented by the IMF and the World Bank in developing countries, and conditions for receiving loans from the IMF

These policies concern the government spendings, the inflation, the free trade, the currencies, the revenues, the markets...

These policies are largely criticized, because they have negative effects for some countries
Politically Independent
Successor of the European Monetary Institute (EMI) (June 1st, 1998)
First president was Wim Duisenberg, former president of Dutch central bank and EMI
While German, Dutch and Belgian supported Duisenberg, French did not
This tension led to Jean-Claude Triche to replace Duisenberg in 2003
Current president is Mario Draghi
Consists of 17 EU member states
HISTORY
CONDITIONALITY OF LOANS
A set of policies and conditions required by the IMF in exchange for financial resources

allows to the IMF to be sure that the country is able to repay the fund

helps member countries to design effective programs, and maintain balance of payments viability and macroeconomic stability

Based on different commitments: prior actions, quantitative performance criteria, indicative target, and structural benchmarks
THANK YOU!
Define & implement monetary policy for the Eurozone
Conduct foreign exchange operations
Take care of foreign reserves
TARGET2
Issuing banknotes and coins
TASKS
Process to quality for IMF:

IMF executive board

Create a report

Board of governors
HISTORY
EXECUTIVE BOARD & GOVERNING COUNCIL
Primary objective of ECB is to maintain price stability within Eurozone (which is to keep inflation of around 2%)
OBJECTIVES
ECB Explained
QUALIFICATIONS
BENEFITS TO MEMBER COUNTRIES
STRUCTURAL ADJUSTMENTS
Technical Assistance
Access to technical assistance in banking, fiscal affairs, and exchange matters

Through assigned IMF staffs or in the form of technical and diagnostic studies, training courses, seminars, workshops and advice and support

Enable member countries to build capacity and help government to implement more effective policies
Economic Policies
Access to the economic policies and other relevant information of all other member countries

Know about each other’s economic development and make important decisions
Financial Support
The IMF provides three forms of financing with different borrowing period

Stand-by agreement
Offers financing of a short-term balance of payments, usually between 12 to 18 months
Extended fund facility
Allows countries to borrow a certain amount of money for 3 to 4 years
Poverty reduction and growth facility
Aims to reduce poverty in the poorest member countries while pushing for economic development
Trade and Investment
Member countries will be able to enjoy increased opportunity for trade and investment under IMF

E.g. Trade liberalisation in exchange for financial resources
FUNCTIONS OF IMF
Surveillance
Role of an "economic doctor"

Monitoring is done by:
Keeping track of economic developments on a
national
,
regional
and
global
basis
Conducting frequent “consultation sessions” with member countries
Global surveillance
Country surveillance
Article IV consultations
Assess economic and financial developments of a country
Meet with parliamentarians and representatives of business, labor unions, and civil society
Team reports findings to IMF management and the Board
Summary of the Board's views transmitted to the country's government
Regional
Surveillance
Involves the examination of policies pursued under currency unions

Regional economic outlook reports prepared to discuss economic developments and key policy issues
Entails reviews by the IMF's Executive Board of global economic trends and developments in the form of reports

World Economic Outlook Reports & Global Financial Stability Report
Cover developments, prospects, and policy issues in international financial markets

Fiscal Monitor
Analyzes the latest developments in public finance
Lending
Acts as a “global fire-fighter”

Provides loans to countries which face difficulties in repaying their international debts and are not able to find sufficient financing on affordable terms
Purpose
Help member countries avoid disruptive economic adjustment or sovereign default by smoothening adjustments to various shocks

Help member countries to obtain financing easily

Help to prevent crisis
Main lending facilities
Stand-by arrangement
Flexible credit line
Precautionary and liquidity line
Rapid financing instrument
Extended fund facility
Trade integration mechanism
Technical Assistance
IMF acts as a “coach” to its member countries

Provides practical guidance and training on how to upgrade their financial institutions and implement appropriate macroeconomic, financial and structural policies
Beneficiaries
About 80 percent of the IMF's technical assistance goes to low- and lower-middle-income countries

Post-conflict countries are major beneficiaries
Types of technical assistance
Ranges from long-term hands-on capacity building to short-notice policy support in a financial crisis

Advise government and central bank officials on specific issues

Offers training courses for government and central bank officials

became a independant Organisation in 1945
France was the first country to borrow money from the IMF
ECB
(European Central Bank)
Price stability
Financial arrangements kept separate
Prohibited from granting loans
Functionally independent and authorized
Future
Kaiserstrasse 29
60311 Frankfurt am Main, Germany
Full transcript