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International Monetary Fund - Coggle Diagram
International Monetary Fund
Promote global monetary co-operation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty around the world
Fundamental mission is to ensure the stability of the international monetary system - it does so in 3 ways
Keeping track of the global economy and the economies of member countries
Lending to countries with balance of payment difficutlities
Giving practical help to members
Members contribute funds to a communal monetary pot which countries experiencing economic crises can borrow money to help stabilise their financial system
IMF works to improve the economies of its member countries in a number of ways, including compiling statistics and undertaking analysis and oversight and review of its members economies
Lending
The IMF is able to provide loans to member countries experiencing financial difficulties and destabilisation of its economy
This financial assistance enables countries to rebuild their international reserves, stabilise their own currency and manage its trading activiites
If funds are borrowed the country has to demonstrate to the IMF what measures it is undertaking to correct underlying problems
Technical assistance
Helps member countries with their economic policies and encourages them to manager their financial affairs more effectively
Offer technical assistance and training to the country if they think this will be of benefit
An important part of the IMF's work, ensuring training and education within a country so that expertise can be developed and assist in prevention of financial crises within the country which should prevent further crises recurring
Structure
IMF has a management team and 17 departments that carry out its policy, analytical and technical work
Has a MD who is head of staff and Chairperson of the Executive Board, the MD is appointed by the Executive Board for a renewable term of 5 years and is assisted by a first deputy MD and 3 deputy MD
The IMF’s employees come from all over the world; they report directly to the IMF and not to the authorities of the countries from where they come. The IMF employees are organised by responsibility: functional, information, liaison, and support.
Survillance
Used in order to identify risks so that policies can be implemented and preventative measures taken
If the policies of one country change this can also impact upon a number of other countries so international cooperation is essential
IMF is the body which ensures cooperation happens
Two main aspects: oversight and advice on the policies of each member country and oversight of world economy
Employs economists who are constantly monitoring members economies, visits to member countries are undertaken to facilitate exchange of views within the local government and consider whether that country has any specific risk in their domestic economy or if on a global level, whether they will impact on global stability
Ifareas of concern are identified then the economists may propose changes in the economic or financial policies as a preventive measure
Usually areas of concern will arise around FX rates, monetary policy, fiscal treatment and financial policies
IMF delegations oon a visit will ensure that they meet with all those who input into or may impact upon the economy of the country
Following the visit, the staff will prepare a fidnings report and present it to the IMF's executive board for discussion - the result of these discussions are then provided to the country
Most countries who have been subject to such a review publish a press release summarising the views of the board, together with details of the report. This assists in global transparency of the economic state of a country and can be used to help avoid future financial crises