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1. Topic : Un it -5 Multilateral Finance Institutions Subject Code: MMBA22E13 Subject Name :International Financial Management Delivered by : Ms.P.Sowmiya

2. Multilateral Finance Institutions: Multilateral Finance Institutions (MFIs) are financial organizations formed by multiple countries that provide financial support and professional advice for economic development projects, particularly in developing countries. They are crucial players in global economic growth, poverty reduction, and sustainable development .

3. World Bank Group Includes IBRD (International Bank for Reconstruction and Development) and IDA( International Development Association) Funds infrastructure, education, healthcare, and poverty alleviation projects. International Monetary Fund (IMF) Provides financial assistance, economic surveillance, and policy advice to promote monetary stability. Asian Development Bank (ADB) Supports social and economic development in Asia-Pacific. African Development Bank ( AfDB ) Focuses on development finance in African nations. Inter-American Development Bank (IDB) Supports economic growth in Latin America and the Caribbean. European Investment Bank (EIB) Provides financing for EU projects and supports climate and innovation objectives. Key Multilateral Finance Institutions:

4. Provide low-interest or concessional loans to member countries. Offer technical assistance and policy advice . Support projects related to infrastructure, social welfare, environment, and governance . Promote regional integration and cross-border cooperation. Help countries meet Sustainable Development Goals (SDGs) . Functions of Multilateral Finance Institutions:

5. Promotes Exchange Rate Stability Provides Financial Assistance Monitors Global Economic Trends (Surveillance) Technical Assistance and Training Fosters Global Monetary Cooperation Supports Sustainable Growth and Poverty Reduction Role of IMF (International Monetary Fund):

6. Insider Trading Tax Evasion and Avoidance Tax Evasion: Illegal non-payment or underpayment of taxes. Tax Avoidance: Use of legal methods to minimize tax liability. Corruption and Bribery In Financial Institutions : Kickbacks, fraudulent loans, manipulation of lending norms. In Government Dealings : Bribes for licenses, contracts, or regulatory approvals. Ethical Issues Prevailing in Global Financial Practices:

7. Excessive Risk-Taking Ethical Dilemma : Financial institutions sometimes take large risks for short-term profits, neglecting long-term impact. 2008 Financial Crisis : Caused by unethical lending and mortgage practices. Impact : Financial instability, unemployment, global recession. Lack of Transparency Issues : Hidden fees, complex derivatives, undisclosed liabilities. Ethical Breach : Investors and stakeholders misled.

8. What is Blockchain ? Blockchain is a decentralized, distributed ledger technology that records transactions across a network of computers in a secure, transparent, and immutable way. Transparency and Trust Enhanced Security Faster Settlement and Clearance Cost Reduction Smart Contracts Auditability and Compliance Importance of Blockchain Technology in Financial Markets:

9. The IBRD is an international financial institution and a part of the World Bank Group . It was established in 1944 to help rebuild European countries after World War II and now provides loans, grants, and financial advice to middle-income and credit-worthy low-income countries. Key Points : Promotes economic development and poverty reduction . Provides long-term loans for infrastructure, education, health, and public administration. Raises funds through global capital markets . Supports sustainable development and capacity-building. IBRD – International Bank for Reconstruction and Development:

10. Definition : A Sovereign Fund , or Sovereign Wealth Fund (SWF) , is a state-owned investment fund made up of money generated by the government, often derived from surplus reserves, commodities exports (like oil), or foreign exchange reserves . Key Features : Owned and managed by national governments. Invests in global financial assets like stocks, bonds, real estate, infrastructure. Aims to preserve wealth , stabilize the economy, and support long-term national interests. Examples: Norway’s Government Pension Fund, Abu Dhabi Investment Authority. Definition of Sovereign Fund:

11. Global Capital Allocation Stabilization of Economies Long-Term Investment Focus Foreign Direct Investment (FDI) Influence in Corporate Governance Currency Market Impacts Impact of Sovereign Wealth Funds (SWFs) in International Finance:

12. International investors are individuals, institutions, or governments that invest across borders in foreign financial markets, seeking diversification, returns, or strategic advantages . Types: Retail Investors : Individuals investing through global platforms. Institutional Investors : Includes pension funds, insurance companies, hedge funds. Sovereign Wealth Funds (SWFs) : Government-owned global investors. Multinational Corporations (MNCs) : Investing in operations or assets abroad. Who are International Investors?

13. Foreign Investment Institutions (FIIs) are foreign entities (like mutual funds, pension funds, hedge funds, banks) that invest in a country’s financial markets , especially in stocks and bonds . Challenges with FIIs Regulatory issues and need for compliance with SEBI (in India) or other national rules. Risk of hot money flows (short-term speculative investments). Concern over foreign control in strategic sectors. Foreign Investment Institutions (FIIs):

14. The IBRD is a part of the World Bank Group , established in 1944 . It provides loans and technical assistance to middle-income and creditworthy low-income countries to support development and reduce poverty. 📌 Functions of IBRD: Project Financing : Funds infrastructure projects like roads, power, water, health, and education. Policy Advice : Offers technical expertise and research to help governments implement reforms. Capacity Building : Provides training and support to strengthen governance and institutions. Poverty Alleviation : Works on improving living standards through sustainable development. Crisis Response : Helps countries recover from natural disasters, pandemics, or financial crises. Functions of IBRD:

15. Exchange Rate Stability Surveillance and Policy Advice Lending to Countries in Crisis Provides emergency loans to countries facing balance of payments crises . Instruments include: Stand-By Arrangements (SBAs) Extended Fund Facility (EFF) Rapid Financing Instrument (RFI) Capacity Development . Monitoring Global Financial Trends Facilitating International Trade Roles in Maintaining Global Monetary Stability: