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FINANCIAL SETTLEMENT

Foreign Economics (College of Foreign Economics)

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MINISTRY OF INDUSTRY AND TRADE

COLLEGE OF FOREIGN ECONOMICS
FACULTY OF INTERNATIONAL TRADE


SUBJECT: INTERNATIONAL ECONOMICS

TOPIC: INTERNATIONAL FINANCIAL
INSTITUTIONS (INTERNATIONAL
MONETARY FUND)
Lecturer: Mr. Nguyen Van Tam

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I. FINANCIAL INSTITUTIONS.
- Concept
II. TYPICAL INTERNATIONAL FINANCIAL INSTITUTIONS.
1. International Monetary Fund .
III. FUNCTIONS AND TASKS OF THE INTERNATIONAL MONETARY FUND.

1. Monitoring.
2. Financial support .
3. Capacity development.

IV. ROLE.
V. ORGANISED BY THE ORGANIZATION OF THE IMF.
VI. THE RELATIONSHIP BETWEEN THE IMF AND VIETNAM.

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BTI NA MSSV TASK

ME

1 2200412
Nguyen Hoang Chi Find content
Thien

2 2200653 give a talk

Mai Thi Ha Quyen

3 Nguyen Tan Tai 2200538 Find content

4 Doan Nhu Quynh 2200486 give a talk

5 2200685
Nguyen Pho Tuan Anh Do PPT

6 Nguyen Thi Thanh Tam 2200712 Do PPT

7 Bui Duc Thinh 2200620 Find content

8 2200680
Nguyen Yen Linh Do PPT

9 2200558
Body Thi Minh Thu Find content

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Group 4

I. FINANCIAL INSTITUTIONS.
Concept: are institutions whose main activity is to act as financial
intermediaries in the process of transferring capital from lenders to Rider

or saver to investor.
II. TYPICAL INTERNATIONAL FINANCIAL INSTITUTIONS.
1. International Monetary Fund.
Conceived in July 1944 at the United Nations Bretton Woods Conference in New
Hampshire, USA
Concept: an international organization that oversees the global financial system
by monitoring exchange rates and balance of payments, as well as providing
technical assistance and financial help when required. The IMF headquarters
are located in Washington, D.C., the capital of the United States
2. Types of IMF credit.
+ Ordinary credit: the borrowed country must have a short-term economic adjustment
program; the maximum amount to be borrowed is 100% of that country's shares in
the fund; term 3-5 years; 3-year grace period with interest rate of about 5-7.5%.
+ Additional loans: the loan amount can be from 100% to 350% of the shares of
that country, depending on the degree of shortage ; 3-5 years; grace period of 3.5
years; interest rates at market interest rates.
+ Provision loan: maximum 62.5% of shares; 5-year term; grace period 3.5 years;
market interest rate.
+ Long-term loans: borrowing countries must have medium-term economic
adjustment programs and all loans must closely follow the implementation of the
program quarterly and annually. The loan amount is equal to 140% of the shares;
term of 10 years; grace period of 4 years; interest rate 6 - 7.5% per annum.
+ Loans to compensate for loss of revenue xexports: for developing countries
with a sudden shortage of trade balance during the year. The maximum loan
amount is equal to 100% of the shares; term and interest rate like regular credit.

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+ Transitional loans to the economy: new types of credit appear to support

countries to transition from a centralized economy to a market economy; 5-year
loan term; 3.25-year grace period; market interest rate. In addition, there are some
other types of credit such as borrowing to maintain conditioning reserves,
borrowing forstructural adjustment, etc.
III. Functions and tasks of the International Monetary Fund

The IMF has the primary task of ensuring the stability of the world's monetary
system – the system of international exchange rates and payments that allows
citizens and their countries to trade with each other.

The IMF supports member countries through 3 main functions:

1. Monitoring

Monitor the global economic situation and member countries and also advise on
economic policies for member countries. This function is performed through
research,analysis, statistics and forecasting of regional, national and global
economies.

The IMF will also provide advice to member countries and promote policies
designed to promote economic stability, reduce vulnerability toeconomic and
financial crises and contribute to rising living standards.

2. Financial support

Provide short- and medium-term financial assistance to Member States when they
encounter temporary difficulties related to the balance of payments. Specifically,
offering interest-free loans with extended maturity periods. The financial
assistance function is a core responsibility of the International Monetary Fund .

3. Capacity Development

Technical development assistance to Member States to improve their ability to run

their economies. Examples include the design and implementation of more
effective policies for management and taxation, monetary policy and exchange
rates, expenditure management, supervision and administration of banking and
financial systems, economic statistics and legislative frameworks.

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IV. Role:

The mission of the organization is as follows: "Promote global monetary

cooperation, financial stability, facilitate international trade. Thereby promoting
sustainable economic growth, as well as reducing poverty worldwide."

1. The IMF plays an important role in developing tools for countries to

measure, assess and improve macroeconomic status as well as financial,
price and monetary stability. Accordingly, the IMF will help countries find
better solutions to implement measures in these areas, identify lessons
learned from countries and clarify the choices any country can have.
2. Help create a global community of practising professionals through
dialogue, consultancy, research as well as technical assistance and training.
3. Promote international cooperation through a permanent institution
responsible for providing a collaborative and consultative apparatus for
solving international monetary issues.
4. Facilitating the expansion and balanced growth of global trade activities,
contributing to the increase in employment demand, real incomes and the
development of productive resources in member countries .
5. Enhance foreign exchange stability in order tomaintain the order of foreign
exchange activities among members, avoiding currency devaluations for
competition between countries .
6. Support the establishment of a multilateral payment system among
members and remove foreign exchange restrictions that affect the growth of
world trade.
7. Shorten the time and minimize the balance in the balance of payments of
member countries .

V. Organizational structure of the IMF

The highest governing body is the Board of Governors, which meets once a year,
decides on basic issues, for a term of 5 years. In addition to the Board of
Governors there are development committees, interim committees of the Board of
Governors. The Board of Directorsis chaired by the general manager, carrying out
the day-to-day work.

The IMF has an organizational structure consisting of the following main components:

 Board of Governors: This is the supreme decision-making body,

consisting of a governor and an alternate governor from member
states .
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The governor is appointed by the member state and is usually the

finance minister or central bank governor .

 Ministerial Committees: The Board of Governors is consulted by two

MinisterialCommittees: the Inter national Monetary and Financial Committee (IMFC) and
the Development Committee.

 Executive Board: The 24-member Executive Board is responsible for

managing the day-to-day affairs of the IMF. The 24 members of the
Executive Board will represent the189 member states. The Executive
Board will discuss and resolve all issues such as reviewing the
economic status of member countries, economic policy issues related
to the global economy.
Voting mechanism

Any resolution may only be passed in the Board of Governors or the Board of
Chief Executive Officers with a minimum of 85% vote. The voting rights of each
member state depend on the contribution of financial resources to the fund.

VI. RELATIONSHIP BETWEEN IMF AND VIETNAM

The Republicjoined the International Monetary Fund in 1956. In 1975
membership passed to the Republic of South Vietnam. In 1976, the Socialist
Republic of Vietnam officially joined under membership of the previous two
countries.
In the period 1993-2004, the IMF provided Vietnam with 3 loans with
total capital of 473 million SDR (equivalent to 653.3 million USD). From April 2004 to
Now, there is no longer a loan program between the two sides. As of 31/12/2012,
Vietnam has paid off all previous debts to the IMF.
Currently, Vietnam-IMF relations continue in many areas such as
macroeconomic monitoring, dialogue, policy advice, training and technical
assistance to Vietnam. Namely:
- Macroeconomic monitoring: Every year, periodically, the IMF conducts
assessments on the macroeconomic situation of Vietnam through 2 delegations:
Article IV delegation and staff delegation to study and update the
macroeconomic situation of Vietnam

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Nam to give advice, assessment and proposals on macro policies in the fields of
finance, banking, trade, SOE reform ... Recently (in 2018), for the first time, the
IMF applied the shortened order (Lapse-of-time, LOT, without the approval
procedure at the Executive Board) to the Article IV Delegation Report for Vietnam,
expressing its appreciation for macroeconomic results and policy management of
the Government and SBV as well as confidence in the economic prospects of
Vietnam and the Government's executive solutions in the coming time.
- Technical assistance: From 1994 to 2020, the IMF provided 200 technical assistance
delegations
support for Party and Government agencies of Vietnam, including the Central Economic Department
The State Bank, the Ministry of Finance, the Ministry of Planning and Investment
(General Statistics Office) on such contents as: Public investment management,
Building models of policy analysis and forecasting, foreign sector statistics, budget
management, monetary and foreign exchange activities, central banking
operations, etc banking supervision inspection, anti-money laundering and
counter-terrorism financing, economic statistics, debt management, etc. In 2020,
in addition to the aforementioned areas, the IMF provided technical assistance on
assessing the framework for managing self-borrowing and self-paying external
debt. In addition, the IMF also regularly organizes dialogues on policy advice and
information for Party, State and Government agencies. In 2020, in addition to some
technical assistance that was delayed under the impact of the Covid epidemic such
as the project to strengthen the statistical capacity of the external sector. Other
technical assistance projects such as the Technical Assistance Project on Building
Capacity Building Forecasting Systems and Policy Analysis continue online.
- Training: Every year, the IMF provides master's and doctoral scholarships and
grants for staff of the SBV and related ministries and branches to attend long-term
and short-term training courses on policy topics and macroeconomics, finance,
banking, currency, statistics, etc. at IMF Regional Training Institutes in Singapore,
USA; IMF Regional Offices such as the Regional Office for Asia and the Pacific
(OAP), Office for Capacity Building in Thailand (CDOT); and selected member
countries. From 1993 to December 2020, the IMF trainedmore than 1700
Vietnamese officials in the fields of macroeconomic management, economics,
finance, banking, etc. In addition, the IMF Representative Office in Vietnam also
organizes technical assistance, secondment, and regular experience exchangewith
officials of ministries and agencies such as the Ministry of Planning and
Investment, the Ministry of Finance and the SBV.
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