IMF Quiz

Screenshot_2018-06-22-08-09-16~2.png

International Monetary Fund (IMF)

The idea of creating a body that could foster international monetary cooperation started at the Bretton Woods conference that took place in New Hampshire, United States in July 1944. During this conference, 44 governments agreed to create a body that could oversee economic cooperation with the aim of avoiding financial turmoil and currency devaluations that had contributed to crises such as the great depression in the 1930s. Two years later in 1946, 46 countries came together to create the International Monetary Fund (IMF). Currently, this organization has a membership of 188 countries.

ORIGIN

Before the start of the Second World War, there was no single international system governing trade or even monetary policies. Whenever a country faced economic difficulties, it tried to deal with its issues in its own way. This created a huge problem because countries would adopt protectionist trade policies to safeguard their industries from goods produced by other countries. For this reason, economic crises became frequent leading to unstable currency exchanges, economic depressions, and currency devaluations. As a result, governments that attended the United Nations Monetary and Financial Conference in NH in 1944 sought to cooperate in order to foster greater economic stability in the world.

International Monetary Fund (IMF) Purpose and Objectives

The aim of setting up a global monetary policy was threefold: foster monetary stability, facilitate trade and fix balance-of-payments problems by making it easy for member countries to access short-term financing. These aspects would make international trade easier, enhance economic growth, and reduce poverty rates.

HOW THE IMF WORKS

At the top of the International Monetary Fund is a three-tiered governance body that consists of a board of governors, an executive board, and a managing director. Out of these, the board of governors is in charge of making monetary policy with each member country having a representative (usually a central bank governor or finance minister). In addition, the Board of Governors elects an International Monetary and Financial Committee (IMFC) that meets two times every year to deliberate on economic and monetary issues that affect the world. After its deliberations, it makes its recommendations to the board of governors.

The executive board is in charge of the IMF’s day-to-day operations including lending money to member countries. This board consists of 24 members and meets at least thrice every week to oversee daily operations. It is the duty of the executive board to select the IMF’s managing director to serve for a renewable five-year period. In turn, the managing director is in charge of supervising the funds 2,800 employees as well as scrutinizing loan proposals. Traditionally, European nations nominate a candidate for the managing director’s post while the post of deputy managing director goes to a US citizen.
Besides the governance structure, member countries contribute money to IMF. Each country’s contribution or quota depends on factors such as gross domestic product and trade with other countries. Furthermore, each country’s quota level determines its capacity to access IMF loans, voting power, and subscriptions. According to figures published by the fund, the total number of quota subscriptions available to members stands at 238 billion IMF Special Drawing Rights (SDRs).

VOTING SYSTEM

Before implementing certain policies, members must vote to approve or disapprove such decisions. To start with, the board of governors has the power to approve loans and policy decisions through a simple majority vote. In most cases, a 70 per cent voting majority is enough to approve such decisions. Certain issues such as admitting a new member require an 85 per cent vote majority. However, a study carried out and published by the Congressional Research Service found that 10 countries control 52.35% of the total votes. These countries include the US (16.75%), Japan (6.23 percent), Germany (5.81%), France (4.29%), UK (4.29%), China (3.81%), Italy (3.16%), Saudi Arabia (2.80%), Canada (2.56%), and Russia (2.39%).

LOAN PROGRAMS

In general, the IMF has several financial assistance programs that member countries can access including the Stand-By Arrangement, the Extended Fund Facility (EFF), the Flexible Credit Line (FCL), the Rapid Credit Facility (RCF), the Post-Catastrophe Debt Relief (PCDR) tryst fund, the Policy Support Instrument (PSI), and the Precautionary and Liquidity Line (PLL). Each of these loan programs addresses a particular need. For example, the PCDR is available to low-income countries that experience devastating natural disasters such as earthquakes or floods. Some of the countries that have benefited from these loan programs in recent years include Greece, Colombia, Mexico, Macedonia, Poland, and Haiti. As of February 2013, the fund’s loan portfolio stood at more than $144.6 billion.

TECHNICAL ASSISTANCE

Besides financial assistance, the IMF also provides technical assistance to member countries. This includes the provision of expertise in financial sector management, macroeconomic policy planning, as well as streamlining tax and revenue collection. In most cases, beneficiaries of this assistance are low and middle-income countries.
Overall, the International Monetary Fund is a major player in the world’s economy. It plays a big role in fostering financial stability and raising the living standards of all humans. This has become necessary following the 2008 financial crisis as well as the current economic crisis affecting the Eurozone. At the same time, it provides financial assistance to members for purposes of correcting trade imbalances with other countries.

http://www.imfsite.org

IMF Quiz

SquarePyramid Quiz on IMF
Reward for Knowledge

Leaderboard: IMF Quiz

maximum of 20 points
Pos. Name Entered on Points Result
Table is loading
No data available
Oyindamola Lateef

About Oyindamola Lateef

View all posts by Oyindamola Lateef →

29 thoughts on “IMF Quiz

  1. Undeniably consider that which you said. Your favourite reason appeared to be at
    the net the easiest thing to be mindful of.
    I say to you, I definitely get irked at the same time as other folks think about
    issues that they just do not know about. You managed to hit the nail upon the top and outlined out the entire thing with no need side-effects ,
    other folks can take a signal. Will probably be again to
    get more. Thanks

  2. Nice post. I used to be checking continuously this weblog and I’m impressed!
    Very helpful information specially the remaining section :
    ) I take care of such information much. I was looking for this certain information for a
    very long time. Thank you and best of luck.

  3. It’s a shame you don’t have a donate button! I’d certainly donate to this
    superb blog! I suppose for now i’ll settle for bookmarking and adding yokur RSS feed
    too my Google account. I look forward to fresh updates and will tak about this site with my Facebook group.

    Chat soon!

  4. Usually I do not read post on blogs, but I wish to say that
    this write-up very forced me to take a look at and do it!
    Your writing taste has been amazed me. Thank you, very great post.

  5. Appreciating the time and effort you put into your website and in depth information you provide. It’s great to come across a blog every once in a while that isn’t the same unwanted rehashed material. Excellent read! I’ve bookmarked your site and I’m adding your RSS feeds to my Google account.

  6. Admiring the time and energy you put into your blog and detailed information you provide. It’s awesome to come across a blog every once in a while that isn’t the same outdated rehashed information. Excellent read! I’ve saved your site and I’m adding your RSS feeds to my Google account.

  7. Hello are using WordPress for your blog platform?
    I’m new to the blog world but I’m trying to get started and create my own. Do
    you require any html coding expertise to make your own blog?
    Any help would be greatly appreciated!

  8. Howdy! I understand this is somewhat off-topic but I needed to ask. Does operating a well-established website like yours take a large amount of work? I am completely new to writing a blog however I do write in my journal every day. I’d like to start a blog so I can easily share my experience and views online. Please let me know if you have any kind of suggestions or tips for new aspiring bloggers. Thankyou!|

  9. An intedesting discussion is definitely worth comment.
    There’s no doubt that thaat you should write more about this topic,
    it may not be a taboo subject but typically people
    don’t talk abouht such topics. To the next! All the best!!

  10. I’m impressed, I must say. Rarely do I encounter a blog that’s both equally edducative and interesting, and without a doubt,
    you’ve hit the nai on the head. The issue is an issue
    that not enoujgh folks are speaking intelligently about.
    I am very happy that I came across this dhring myy search for something regarding
    this.

  11. I have read slme ecellent stuff here. Certainly price
    bookmarking for revisiting.I wonder how a lot effort you place to create
    one of these great informative website.

  12. Your style is really unmique in coparison to otrher foks
    I have read stuff from. Many thanks for posting when you have the opportunity,
    Guess I will just book mark thiks web site.

Leave a Reply


Your email address will not be published. Required fields are marked *