The IMF tries to stabilize world financial markets by encouraging member countries to work together and implement laws that promote economic development and international trade.
International Financial Institutions (IFIs) are organizations created by national governments of different nations. The World Bank, the International Monetary Fund (IMF), and the African Development Bank (AfDB) are international financial institutions. Some institutions, such as the World Bank, provide lending services to nations around the world and others focus on working with governments and humanitarian organizations in a specific area. International financial institutions seek to promote economic development and improve economic relations between nations.
The World Bank was founded in 1944 with the intention of reducing poverty around the world. After World War II, the World Bank, with funding from nations like the United States and the United Kingdom, began lending to war-torn nations. Since its inception, the World Bank has focused its attention on fighting poverty by lending to developing countries. The United States is the main international power behind the bank and appoints the president of the bank, who has always been a citizen of the United States since the inception of the organization.
One of the best known international financial institutions is the IMF. It was also founded in 1944 and its original purpose was to establish an international system of foreign exchange rates. Some nations are not part of the IMF and its policies and guidelines have a direct impact only on member nations. The IMF tries to stabilize world financial markets by encouraging member countries to work together and implement laws that promote economic development and international trade. IMF member countries can borrow money from the fund, and during recessions, some countries rely heavily on these loans to offset the danger of economic collapse.
The ADB is an organization founded in 1964 with the aim of facilitating the economic development of African nations. National governments can obtain low-cost loans from ADB to finance projects such as the implementation of new communication systems, improved sanitation and roads. Although founded as an African entity, the bank now allows non-African countries to join. The United States, China and Japan are among the non-African member states that play a role in AfDB.
Among the international financial institutions with the greatest political power is the European Investment Bank (EIB). The EIB was created by the members of the European Union (EU) in 1958. Member countries can obtain loans from the EIB, but its main purpose is to provide financial support for the EU’s political objectives. In Europe, the bank focuses primarily on promoting cohesion among member countries, but outside of Europe, the bank helps drive economic reform and energy conservation.