INTERNATIONAL

FINANCIAL INSTITUTIONS

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International financial system refers to those
financial institutions that act on the
international level
•The World Bank Group
•International Monetary Fund
•Asian Development Bank
•African Development Bank
•Inter American Development Bank
•European Bank for Reconstruction and Development
•Bank for International Settlements
Otherwise known as super national banks

•Bank of England
•The Federal Reserve System (The Fed)
•European Central Bank (ECB)
Major central banks in the globe

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The Bretton Wood Twins
The Bretton Woods conference proposed the setting
up of …

World Bank
&
International Monetary Fund (IMF)

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 The World Bank Group…
Established in President HQ
1944 Paul Wolfowitz Washington DC

•International Bank for Reconstruction and

Development (IBRD)
•International Finance Corporation (IFC)
•International Development Association (IDA)
•Multilateral Investment Guarantee Agency
(MIGA)
•International Centre for Settlement of
Investment Disputes (ICSID)
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IBRD
Established in 1944

• Assist in reconstruction & development of the

territories of the members, by facilitating the
investment of capital for productive purpose.
• To promote private foreign investments.
• Long range balanced growth of international
trade & maintenance of the Balance of Payments
(BoP)

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IFC
Established in 1956

• Financing private sector projects located in the

developing world.
• Helping private companies in the developing
world mobilize financing in international financial
markets.
• Providing advice and technical assistance to
businesses and governments.

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IDA
Established in 1960

• Provides long-term interest-free loans to the

poorest of developing countries on terms more
lenient than those of the World Bank proper

Criteria observed in approving IDA credit:

• Poverty test
• Performance test
• Project test
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ICSID
Established in 1966

• Provides facilities for the conciliation and

arbitration of investment disputes between
member countries and individual investors

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MIGA
Established in 1988

• Promotes Foreign Direct Investment (FDI) into

developing countries, by

 insuring investors against political risk,

 advising governments on attracting
investment,
 sharing information through on-line investment
information services, and
 mediating disputes between investors and
governments
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 IMF
Established in Managing Director HQ
1944 Rodrigo de Rato y Figaredo Washington DC

An international organization of 184 member countries

•Promotes international monetary cooperation.
•Facilitates the expansion & balanced growth of
International trade.
•Promotes exchange stability & maintain orderly
exchange arrangements among members.
•Shorten the duration & lessen the degree of
disequilibrium in the international BoP of member
countries.
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IMF: Resources

•Subscription by members
SDR

•Borrowings
General Arrangements to Borrow (GAB) 1962
New Arrangement to Borrow (NAB) 1998

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Asian Development Bank
Established in President HQ
1966 Haruhiko Kuroda Manila

An international organization of 75 member countries

• Promotes economic and social development in Asian and Pacific

countries
• Help its developing member countries reduce poverty and improve
the quality of life of their citizens
• Strengthen private sector to improve productivity & efficiency
• Enable effective use of human & capital resource of the member
countries

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African Development Bank
Established in President HQ
1964 Donald Kaberuka Abidjan, Ivory
Coast
An international organization of 66 member countries

• Aims to spur both economic development and social progress among

its members
• It is a conglomeration of the African Development Bank (ADB), the
African Development Fund (ADF), and the Nigeria Trust Fund (NTF).
• It has six associated institutions through which public and private
capital is channeled

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Inter-American
Development Bank
Established in President HQ
1959 Luis Alberto Moreno Washington DC

An international organization of 45 member countries

• Supports Latin American and Caribbean economic/social

development and regional integration by lending mainly to public
institutions.
• Provides funding and technical assistance, coordinates economic
development, and jointly finances loans with other institutions.

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European Bank for Reconstruction
and Development

Established in President HQ
1991 Jean Lemierre London

An international organization of 60 member countries

• Helps to build market economies and democracies in 27 countries

from central Europe to central Asia
• Provides project financing for banks, industries and businesses, both
new ventures and investments in existing companies.
• Works with publicly owned companies to support privatisation,
restructuring state-owned firms and improvement of municipal
services.

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Bank for International Settlements

Established in General Manager HQ

1930 Malcolm D Knight Basel

 An institution for cooperation among the central banks of the

various countries
 world's oldest international financial institution and remains the
principal centre for international central bank cooperation

• Exists to foster cooperation among central banks and other agencies

in pursuit of monetary and financial stability
• Provides banking services to central banks

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Important Central Banks in the
International Financial System…

•Bank of England
•The Federal Reserve System (The Fed
•European Central Bank (ECB)

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Bank of England
Established in Governor HQ
1694 Mervyn King London

The Central Bank of the United Kingdom

• The Bank of England was incorporated on July 27, 1694, as a

private joint-stock association.
• On March 1, 1946, the bank, privately owned for 252 years, was
placed under government ownership
• It funds public borrowing, issues bank notes, and manages the
country's gold and foreign-exchange reserves.
• It is an important adviser to the government on monetary policy
and is largely responsible for implementing the chosen policy by
its dealings in the money, bond, and foreign-exchange markets.

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The Fed
Established in Chairman of Governors HQ
1913 Ben S Bernanke Washington DC

The Central Bank of the United States of America

• The Federal Reserve System is a network of twelve Federal

Reserve Banks and a number of branches under the general
oversight of the Board of Governors.
• Acts as a fiscal agent for the U.S. government
• Custodian of the reserve accounts of commercial banks
• Makes loans to commercial banks
• It is authorized to issue Federal Reserve notes that constitute the
entire supply of paper currency of the country

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 ECB
Established in President HQ
1998 Jean-Claude Trichet Frankfurt

The Central Bank of the Europe’s single currency, the Eur

• The euro area comprises the 12 European Union countries that

have introduced the euro since 1999.
• Maintains the euro's purchasing power and thus price stability in
the euro area.
• Conducting monetary policy for the euro area - the world’s largest
economy after the United States.

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 Thank
You
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