The IMF Structure

This is my academic work on the IMF.

1. The International Monetary Fund
presented by
James L. Adams
Western International University
INB 605 Structure of the Global Economy
Instructor: Professor Robert Lambert
July 30, 2008
“an organizational perspective”

2. The IMF Organizational
Background
History
•IMF was founded by John Maynard
Keynes and 44 charter nations
during the United Nations Monetary
and Financial Conference in July
1944 as the Bretton Woods
Institution.
•Headquartered: Bretton Woods,
New Hampshire
•Recognized in December 27, 1947
as the International Monetary Fund
with 29 of the 44 members
remaining.
March 31, 2008
•Headquartered: Washington,
DC
•Member nations: 185
•Employees: 2600
•Funds Available: $209.5 billion
•Loans Outstanding: $16.1 billion
•64 Countries owe the IMF (total)
•56 Countries are low-income
owed $6.5 billion
•8 Countries (are not low-
income) owed $9.6 billion

3. Purpose of the IMF
IMF Agenda
•Facilitate global monetary
exchange
•Promote exchange stability
•Organize exchange arrangements
•Foster economic growth
•Enhance higher employment
•Provide temporary financial
assistance
•Provide training & advice for
balance of payment issues
3 Primary Tasks of IMF
•Surveillance
•Monitoring financial & economic
activities to develop policies,
strategies & recommendations for
proactive crisis prevention.
•Lending
•Funding for short-term, low-interest
loans for macroeconomic issues
related to political & economic
stability.
•Technical Assistance
•Training & consultation for loan
applications, policy reforms and the
interpretation of data.

4. Surveillance
Multi-lateral (Macro-economic)
•Annual evaluation process for
all member nations based on
their financial expert
assessments of economic and
financial developments.
•Reason: To assess
vulnerabilities, threats, trends
and developments in the whole
international economy.
Bi-Lateral (Micro-economic)
•Economist visit member states
individually to gather
information from the nation’s
central bank and officials, and
conduct meetings pertaining to
that nation’s economy.
•The Economist then submit
formal reports to the Executive
Board of the IMF.
•The Executive Board makes
recommendations to the
central bank officers and file a
transparent Public Information
Notice of the data.
•Reason: To ensure compliance
with the Articles of Agreement.

5. Lending
The Lending Process
2.Any member of the IMF may request funding.
3.Agree to abide by the transparency standards, codes and
policies of the facility.
4.Agree to a balance of payment resolution.
5.Bi-lateral Surveillance is conducted on current economic
conditions.
6.Submit a repayment strategy including the policy change
recommendations in a Letter of Intent to the Executive Board
of the IMF for approval.
Poverty Reduction & Growth Facilities and Exogenous Shock
Facilities
are loans programs for impoverished nations with concessional
interest rates (about 0.5%) with special terms and grace periods
for repayment.

6. Facilities
Facilities are loan programs set-up by the IMF to address specific needs of member
nations. It should also be noted that IMF funding is disbursed in phases so that
adjustments may be made to mitigate risk.
Facility Purpose Type Duration Repay Surcharge
Stand By Arrangements
(Most lucrative loan.)
BoP Short-
term
1 – 2 yrs2 - 4 yrs Avg 4%
Extended Fund Facility
(Recommended Reforms)
BoP Long-
Term
3 yrs 5 – 7 yrs
Supplemental Reserve
Facility
(Developing Nations)
Economic
Recovery
Short-
term
Large-
scale
financing
1 yr 1 – 1.5
yrs
Avg 4%
Compensatory Financing
Facility
(Global Commodity Price
Issues)
Drop in
Export
Earnings
Short-
term
1 – 2 yrs2 - 4 yrs
Emergency Assistance
Loans
(Disasters & Post-War)
(Subsidies may be
available)
Disaster
Recovery
Long-term
(Base
Rate)
3 - 5 yrs

7. Technical Assistance
•1/5
th
of IMF Budget goes to Technical Assistance
•Missions can be dispatched from Headquarters to train
central bank executives and officials.
•Online courses are provided for members to train.
•Seminars & Workshops
•Seven Regional Training Institutes located worldwide.
•Asian Development Bank, African Regional Bank and
others provide multi-lateral funding.
•The goal is to educate to empower financial leaders in an
effort to sustain and grow a strong international economy.

8. Funding Process Overview
1.Member nation identifies a need from surveillance
& evaluation data.
2.Implementation of policy changes and
recommendations for compliance.
3.File Letter of Intent.
4.Monitor the use of phased funding and economic
conditions, watching expenditures, growth and
lowering of BoP.
5.Evaluation of previous disbursements, economic
trends, growth and impact to correct problem.
6.Reassess and resolve unforeseen results due to
policy changes, economic conditions and external
factors.

9. Distinctions – IMF & World Bank
•Both were created due to a difference in financial labor and
responsibility.
•World Bank
•Funds individual projects to serve the public good such as dam
construction, roads and other infrastructure related projects.
•Makes longer-term loans.
•Requires IMF Membership.
•International Monetary Fund
•Does not issue funds for individual projects.
•Focuses on BoP issues.
•Provides facts, statistics and information.

10. The Future of the IMF
•Surveillance has been broadened to include capital markets
and investments.
•Transparency Standards & Codes have been enhanced in
banking supervision, accounting and many aspects of the
global financial infrastructure to thwart terrorist activities
through money laundering and illicit use of the international
financial system.
•Member nations will face challenges in trying to adhere to
policies and apply and ratify them in their own countries.
•Membership will expand with nations rising in status and
assuming more financial responsibility.

11. THE END
QUESTIONS?