International Finance and Accounting

IMS-BOP-Ipr

Muslima Zahan, PhD

Assistant Professor

10° lecture BUS685 # 1

North South University

International monerary system (ims)

The international monetary system refers to the

institutional arrangements that countries adopt to govern
exchange rates
IMS sets of internationally agreed rules, conventions, and
supporting institutions that facilitate internaional trade,
cross-border investment and generally the relocation of
capital between nation states.
It is to solve the problem relating to international trade
Liquidity
Adjustment, and
stability
International Monetary system definition

The international monetary system refers to the

operating system of the financial environment, which
consists of financial institutions, 
multinational corporations, and investors. The
international monetary system provides the
institutional framework for determining the rules and
procedures for international payments, determination
of exchange rates, and movement of capital.
Stages of Evolution of IMS
The era of bimetallism
Before 1870, the international monetary
system consisted of bimetallism, where both gold and
silver coins were used as the international modes of
payment.
Gold standard
The international gold standard prevailed from 1875 to
1914. In a gold standard system, gold alone is assured of
unrestricted coinage. There was a two-way convertibility
between gold and national currencies at a stable ratio.
Stages continues-----
The gold exchange standard
The Bretton Woods System was established after World War
II and was in existence during the period 1945-1972. In 1944,
representatives of 44 nations met at Bretton Woods, New
Hampshire, and designed a new postwar international
monetary system. 
Flexible Exchange rate regime
The flexible exchange rate regime was formally ratified in 1976
by IMF members through the Jamaica Agreement. The
agreement stipulated that central banks of respective
countries could intervene in the exchange markets to guard
against unwarranted fluctuations.
Flexible Exchange rate system
Free-floating or independent floating
The exchange rate is determined by the market, with
foreign exchange intervention occurring only to prevent
undue fluctuations.

 Managed –floating System

The central monetary authority of countries influences
the movement of the exchange rate through active
intervention in the forex market with no preannounced
path for the exchange rate. 
Money and exchange rate
The Bretton Woods Agreement, signed by the main
industrial economies after the Second World War,
established a set of rules to regulate the international
monetary system with the intention of assuring
monetary stability. The Agreement, which was in force
between 1944 and 1971, reckoned a fixed parity of other
currencies to the dollar, and a fixed parity of the dollar
to gold.
Participant: multilateral organizations and intl financial institutions
IMF
The International Monetary Fund (IMF) was established in
1946 to “promote international monetary cooperation,
exchange stability and orderly exchange arrangements; to
foster economic growth and high levels of employment; and
to provide temporary financial assistance to countries to help
ease balance of payments adjustment.” It carries out these
functions through loans, monitoring, and technical
assistance.
In 1995, the IMF began to provide this type of emergency
assistance to countries facing post-conflict scenarios in order
to enable them to reestablish macroeconomic stability and to
provide a foundation for recovery, namely in the form of long-
term sustainable growth.
Imf vehicle

The Rapid Financing Instrument (RFI)

The Emergency Natural Disaster Assistance (ENDA) program 
 The Emergency Post-Conflict Assistance (EPCA) program.
 The Rapid Credit Facility (RCF)
 The IMF Poverty Reduction and Growth Facility (PRGF)

The IMF offers technical assistance in these cases to aid these

countries in building their capacity to implement
macroeconomic policy. This can include tax and government
expenditure capacity; the reorganization of fiscal, monetary,
and exchange institutions; and guidance in the use of aid
resources.
IMF and Central Bank Policies
Instability reduction and Central Bank’s Reserve
Policy
Central banks play a crucial role in ensuring economic
and financial stability. They conduct monetary policy to
achieve low and stable inflation. In the wake of the global
financial crisis, central banks have expanded their
toolkits to deal with risks to financial stability and to
manage volatile exchange rates
Central Bank’s cooperation to financial integration
and global liquidity
Implication for managers
For Managers understanding the international
monetary system is important for—
Currency Management
Business Strategy
Corporate Government Relationship
Risk Categories
Operational Risk
Country Risk
Financial Risk Legal
Credit Risk Model
Market Risk Political
Interest rate Valuation
Currency Reputational
Equity Volatility
Commodity Settlement
Liquidity Profit
Refinancing Systematic Risk
International Financial Management
Accounting and Culture
Cultural differences in Measurement and Disclosure for accounting system
Balance of payment (bop)
statement
bop
Reasons for deficit balance

Government liberalized imports

War/political crisis/Pandemic
Rapid industrialization (import of capital goods,
technology etc.)
Slow growth of invisibles
Devaluation or depreciation of currency
Less exports etc.
https://www.bb.org.bd/econdata/bop.php
Bangladesh Bureau of Statistics
Export Promotion Bureau
Intellectual Property rights
as of WTO
(ii) Industrial property. 
Industrial property can usefully be divided into two main
areas:
One as the protection of distinctive signs, in particular
trademarks and geographical indications
signs aims to stimulate and ensure fair competition and to
protect consumers, by enabling them to make informed
choices between various goods and services
inventions (protected by patents), industrial designs
and trade secrets. (source:
https://www.wto.org/english/tratop_e/trips_e/intel1_e.htm)
 Bangladesh

Legal Information
Joined WIPO in 1985
Membership of WIPO treaties and
Treaties notifications
Membership of WIPO bodies
GI

The Financial Express Published : 19 Nov 2016, 21:31:01

Jamdani registered as GI product
A geographical indication (GI) is a name or sign used
on certain products which corresponds to a specific
geographical location or origin (e.g. a town, region, or
country).
WTO
Agreement on Trade-Related Aspects of Intellectu
al Property Rights
(TRIPS) Agreement as: "Indications which identify a
good as originating in the territory of a member, or a
region or a locality in that territory, where a given
quality, reputation or characteristic of the good is
essentially attributable to its geographic origin.
Thank you