Misplaced Pages

#379620

84-555: The International Monetary Fund defines a global recession as "a decline in annual per‑capita real World GDP ( purchasing power parity weighted), backed up by a decline or worsening for one or more of the seven other global macroeconomic indicators: Industrial production, trade, capital flows, oil consumption, unemployment rate, per‑capita investment, and per‑capita consumption". According to this definition, since World War II there were only four global recessions (in 1975, 1982, 1991 and 2009), all of them only lasting

168-719: A Bank for Reconstruction and Development. IBRD." (The word "International" was added to the Bank's title late in the Bretton Woods Conference.) The United States also invited a smaller group of countries to send experts to a preliminary conference in Atlantic City, New Jersey , to develop draft proposals for the Bretton Woods conference. The Atlantic City conference was held from June 15–30, 1944. The Bretton Woods Conference had three main results: (1) Articles of Agreement to create

252-434: A January 2014 report entitled "Fiscal Policy and Income Inequality" that stated that "Some taxes levied on wealth, especially on immovable property, are also an option for economies seeking more progressive taxation ... Property taxes are equitable and efficient, but underutilized in many economies ... There is considerable scope to exploit this tax more fully, both as a revenue source and as a redistributive instrument." At

336-480: A broader focus of promoting market-liberalizing reforms through structural adjustment programs. This shift occurred without a formal renegotiation of the organization's charter or operational guidelines. The Ronald Reagan administration , in particular Treasury Secretary James Baker , his assistant secretary David Mulford and deputy assistant secretary Charles Dallara , pressured the IMF to attach market-liberal reforms to

420-593: A fixed rate. It would be the unit for accounting between nations, so their trade deficits or surpluses could be measured by it. On top of that, each country would have an overdraft facility in its "bancor" account with the ICU. Keynes proposed having a maximum overdraft of half the average trade size over five years. If a country went over that, it would be charged interest, obliging a country to reduce its currency value and prevent capital exports. But countries with trade surpluses would also be charged interest at 10% if their surplus

504-487: A position of oversight of only exchange rates, their function became one of surveillance of the overall macroeconomic performance of member countries. Their role became a lot more active because the IMF now manages economic policy rather than just exchange rates. In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality , which was established in the 1950s. Low-income countries can borrow on concessional terms , which means there

588-415: A quota system, countries contribute funds to a pool from which countries can borrow if they experience balance of payments problems. The IMF works to stabilize and foster the economies of its member countries by its use of the fund, as well as other activities such as gathering and analyzing economic statistics and surveillance of its members' economies. The current managing director (MD) and chairperson of

672-583: A recession, which included two successive quarterly declines in gross domestic product (GDP), a measure of the nation's output. This two-quarter metric is now a commonly held definition of a recession. In the United States, the National Bureau of Economic Research (NBER) is regarded as the authority which identifies a recession and which takes into account several measures in addition to GDP growth before making an assessment. In many developed nations (but not

756-594: A system was in their national best interests. Early in World War II, John Maynard Keynes of the British Treasury and Harry Dexter White of the United States Treasury Department independently began to develop ideas about the financial order of the postwar world. (See below for Keynes's proposal for an International Clearing Union .) After negotiation between officials of the United States and

840-461: A year (although the 1991 recession would have lasted until 1993 if the IMF had used normal exchange rate weighted per‑capita real World GDP rather than the purchasing power parity weighted per‑capita real World GDP). The 2009 global recession, also known as the Great Recession , was by far the worst of the four postwar recessions, both in terms of the number of countries affected and

924-498: A year and is responsible for electing or appointing an executive director to the executive board. While the board of governors is officially responsible for approving quota increases, special drawing right allocations, the admittance of new members, compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws, in practice it has delegated most of its powers to the IMF's executive board. The board of governors

SECTION 10

#1732844728380

1008-869: Is a period of time with no interest rates, through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF). Non-concessional loans, which include interest rates, are provided mainly through the Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), and the Extended Fund Facility. The IMF provides emergency assistance via

1092-658: Is advised by the International Monetary and Financial Committee and the Development Committee. The International Monetary and Financial Committee has 24 members and monitors developments in global liquidity and the transfer of resources to developing countries . The Development Committee has 25 members and advises on critical development issues and on financial resources required to promote economic development in developing countries. Bretton Woods Conference The Bretton Woods Conference , formally known as

1176-468: Is on a downtrend since the late 1980s. The world growth is projected to slow from 5% in 2007 to 3.75% in 2008 and to just over 2% in 2009. Downward revisions in GDP growth vary across regions. Among the most affected are commodity exporters, and countries with acute external financing and liquidity problems . If a global recession were to occur in its full magnitude, an estimated 100 million jobs would be lost around

1260-441: Is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance-of-payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse economic consequences. The IMF provides alternate sources of financing such as

1344-512: The COVID-19 pandemic . This was in addition to the $ 50 billion fund it had announced two weeks earlier, of which $ 5 billion had already been requested by Iran . One day earlier on 11 March, the UK called to pledge £150 million to the IMF catastrophe relief fund. It came to light on 27 March that "more than 80 poor and middle-income countries" had sought a bailout due to the coronavirus. On 13 April 2020,

1428-708: The Cold War limited the Fund's membership, with most countries in the Soviet sphere of influence not joining until 1970s and 1980s. The Bretton Woods exchange rate system prevailed until 1971 when the United States government suspended the convertibility of the US$ (and dollar reserves held by other governments) into gold. This is known as the Nixon Shock . The changes to the IMF articles of agreement reflecting these changes were ratified in 1976 by

1512-673: The Great Depression , countries sharply raised barriers to trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade. This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in Bretton Woods, New Hampshire , in

1596-602: The IMF , whose purpose was to promote stability of exchange rates and financial flows. (2) Articles of Agreement to create the IBRD , whose purpose was to speed reconstruction after the Second World War and to foster economic development, especially through lending to build infrastructure. (3) Other recommendations for international economic cooperation. The Final Act of the conference incorporated these agreements and recommendations. Within

1680-659: The International Bank for Reconstruction and Development (IBRD, later part of the World Bank group ) and the International Monetary Fund (IMF). This led to what was called the Bretton Woods system for international commercial and financial relations. Multilateral economic cooperation among countries was crucial for the post-war world economies. Countries sought to establish an international monetary and financial system that fostered collaboration and growth among

1764-487: The Jamaica Accords . Later in the 1970s, large commercial banks began lending to states because they were awash in cash deposited by oil exporters. The lending of the so-called money center banks led to the IMF changing its role in the 1980s after a world recession provoked a crisis that brought the IMF back into global financial governance. In the mid-1980s, the IMF shifted its narrow focus from currency stabilization to

SECTION 20

#1732844728380

1848-554: The Poverty Reduction and Growth Facility . Upon the founding of the IMF, its three primary functions were: The IMF's role was fundamentally altered by the floating exchange rates after 1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine whether a shortage of capital was due to economic fluctuations or economic policy. The IMF also researched what types of government policy would ensure economic recovery. A particular concern of

1932-784: The Special Data Dissemination Standard (SDDS). The executive board approved the SDDS and GDDS in 1996 and 1997, respectively, and subsequent amendments were published in a revised Guide to the General Data Dissemination System . The system is aimed primarily at statisticians and aims to improve many aspects of statistical systems in a country. It is also part of the World Bank Millennium Development Goals (MDG) and Poverty Reduction Strategic Papers (PRSPs) . The primary objective of

2016-591: The United Nations Monetary and Financial Conference , was the gathering of 730 delegates from all 44 allied nations at the Mount Washington Hotel , in Bretton Woods, New Hampshire , United States, to regulate what would be the international monetary and financial order after the conclusion of World War II . The conference was held from July 1 to 22, 1944. Agreements were signed that, after legislative ratification by member governments, established

2100-454: The first Greek bailout that totaled €110 billion, to address the great accumulation of public debt, caused by continuing large public sector deficits. As part of the bailout, the Greek government agreed to adopt austerity measures that would reduce the deficit from 11% in 2009 to "well below 3%" in 2014. The bailout did not include debt restructuring measures such as a haircut , to the chagrin of

2184-447: The movement of capital , in addition to their responsibility to govern the system. The highest body of the Bretton Woods Conference was the plenary session, which met only in the first and last days of the conference and existed mainly to confirm decisions reached by the lower bodies. The conference conducted its major work through three "commissions". Commission I dealt with the IMF and was chaired by Harry Dexter White , Assistant to

2268-415: The 1930s . The IMF formally came into existence on 27 December 1945, when the first 29 countries ratified its Articles of Agreement. By the end of 1946 the IMF had grown to 39 members. On 1 March 1947, the IMF began its financial operations, and on 8 May France became the first country to borrow from it. The IMF was one of the key organizations of the international economic system; its design allowed

2352-428: The 1940s and 1950s, and the recruitment of staff exposed to new thinking in economics. The IMF provided two major lending packages in the early 2000s to Argentina (during the 1998–2002 Argentine great depression ) and Uruguay (after the 2002 Uruguay banking crisis ). However, by the mid-2000s, IMF lending was at its lowest share of world GDP since the 1970s. In May 2010, the IMF participated, in 3:11 proportion, in

2436-600: The Bank for International Settlements at the earliest possible moment." The proposal passed Commission III without objection and was adopted as part of the Final Act of the conference. Momentum for dissolving the BIS faded after U.S. President Franklin Roosevelt died in April 1945. Under his successor, Harry S. Truman , the top U.S. officials most critical of the BIS left office, and by 1948

2520-514: The Code of Conduct in the IMF Articles of Agreement, and to provide national economic information. However, stricter rules were imposed on governments that applied to the IMF for funding. The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates secured at rates that could be adjusted only to correct a "fundamental disequilibrium" in the balance of payments, and only with

2604-401: The Final Act, the most important part in the eyes of the conference participants and for the later operation of the world economy was the IMF agreement. Its major features were: The seminal idea behind the Bretton Woods Conference was the notion of open markets . In his closing remarks at the conference, its president, U.S. Treasury Secretary Henry Morgenthau , stated that the establishment of

Global recession - Misplaced Pages Continue

2688-463: The GDDS is to encourage member countries to build a framework to improve data quality and statistical capacity building to evaluate statistical needs, set priorities in improving timeliness, transparency , reliability, and accessibility of financial and economic data. Some countries initially used the GDDS, but later upgraded to SDDS. Some entities that are not IMF members also contribute statistical data to

2772-513: The IMF in 1980 after losing the support of the then United States President Jimmy Carter and was replaced by the People's Republic of China . However, "Taiwan Province of China" is still listed in the official IMF indices. Poland withdrew in 1950—allegedly pressured by the Soviet Union —but returned in 1986. The former Czechoslovakia was expelled in 1954 for "failing to provide required data" and

2856-513: The IMF and IBRD, though its successor the Russian Federation did in 1992. Australia and New Zealand were likewise absent from formal participation at Savannah (Australia sent observers), though they joined the IMF and IBRD later. At the conference, gross domestic product was adopted as the primary measure of country's economies. Because of its success in founding two international organizations that have had long and influential lives,

2940-507: The IMF and the IBRD marked the end of economic nationalism . This meant countries would maintain their national interest, but trade blocs and economic spheres of influence would no longer be their means. The second idea behind the Bretton Woods Conference was joint management of the Western political-economic order, meaning that the foremost industrial democratic nations must lower barriers to trade and

3024-609: The IMF is Bulgarian economist Kristalina Georgieva , who has held the post since 1 October 2019. Indian-American economist Gita Gopinath , previously the chief economist, was appointed as first deputy managing director, effective 21 January 2022. Pierre-Olivier Gourinchas was appointed chief economist on 24 January 2022. According to the IMF itself, it works to foster global growth and economic stability by providing policy advice and financing to its members. It also works with developing countries to help them achieve macroeconomic stability and reduce poverty. The rationale for this

3108-425: The IMF is part, are joint managers of this programme, which was approved by the executive directors of the IMF on 15 March 2012 for XDR 23.8 billion and saw private bondholders take a haircut of upwards of 50%. In the interval between May 2010 and February 2012 the private banks of Holland, France, and Germany reduced exposure to Greek debt from €122 billion to €66 billion. As of January 2012 ,

3192-554: The IMF said that it "would provide immediate debt relief to 25 member countries under its Catastrophe Containment and Relief Trust (CCRT)" programme. Not all member countries of the IMF are sovereign states, and therefore not all "member countries" of the IMF are members of the United Nations. Amidst "member countries" of the IMF that are not member states of the UN are non-sovereign areas with special jurisdictions that are officially under

3276-508: The IMF terms the past three global recessions of the last three decades, global per capita output growth was zero or negative. International Monetary Fund The International Monetary Fund ( IMF ) is a major financial agency of the United Nations , and an international financial institution funded by 190 member countries, with headquarters in Washington, D.C. It is regarded as

3360-533: The IMF was to prevent financial crises, such as those in Mexico in 1982, Brazil in 1987, the 1997 Asian financial crisis , and the 1998 Russian financial crisis , from spreading and threatening the entire global financial and currency system. The challenge was to promote and implement a policy that reduced the frequency of crises among emerging market countries, especially the middle-income countries which are vulnerable to massive capital outflows. Rather than maintaining

3444-551: The IMF's agreement. Member countries of the IMF have access to information on the economic policies of all member countries, the opportunity to influence other members' economic policies, technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties, and increased opportunities for trade and investment. The board of governors consists of one governor and one alternate governor for each member country. Each member country appoints its two governors. The Board normally meets once

Global recession - Misplaced Pages Continue

3528-478: The Rapid Financing Instrument (RFI) to members facing urgent balance-of-payments needs. The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries. Accurate estimations require a degree of participatory surveillance. Market sizes and economic facts are estimated using member-state data, shared and verifiable by

3612-589: The Secretary of the U.S. Treasury and the chief American negotiator at the conference. Commission II dealt with the IBRD and was chaired by John Maynard Keynes , economic adviser to the British Chancellor of the Exchequer and the chief British negotiator at the conference. Commission III dealt with "other means of international financial cooperation" and was chaired by Eduardo Suárez , Mexico's Minister of Finance and

3696-482: The Swiss, Brazilian, Indian, Russian, and Argentinian Directors of the IMF, with the Greek authorities themselves (at the time, PM George Papandreou and Finance Minister Giorgos Papakonstantinou ) ruling out a haircut. A second bailout package of more than €100 billion was agreed upon over the course of a few months from October 2011, during which time Papandreou was forced from office. The so-called Troika , of which

3780-620: The United Kingdom and consultation with some other Allies , a "Joint Statement by Experts on the Establishment of an International Monetary Fund", was published simultaneously in a number of Allied countries on April 21, 1944. On May 25, 1944, the U.S. government invited the Allied countries to send representatives to an international monetary conference "for the purpose of formulating definite proposals for an International Monetary Fund and possibly

3864-466: The United States was the world's largest economy at the time, and the main prospective source of funds for the IMF and IBRD, the U.S. delegation had the largest influence on the proposals agreed to at Bretton Woods. The Bank for International Settlements (BIS) became an object of scrutiny when the Norwegian delegation put forth evidence that the BIS was involved in war crimes . The BIS, formed in 1930,

3948-490: The United States), the two-quarter rule is also used for identifying a recession. Whereas a national recession is identified by two quarters of decline, defining a global recession is more difficult, because a Developing country is expected to have a higher GDP growth than a Developed country . According to the IMF, the real GDP growth of the emerging and developing countries is on an uptrend and that of advanced economies

4032-405: The United States, to discuss a framework for postwar international economic cooperation and how to rebuild Europe. There were two views on the role the IMF should assume as a global economic institution. American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time. Most of White's plan was incorporated into

4116-401: The United States, which was the world's biggest creditor, said "We have been perfectly adamant on that point. We have taken the position of absolutely no." Instead, White proposed an International Stabilization Fund, which would place the burden of maintaining the balance of trade on the deficit nations, and impose no limit on the surplus that rich countries could accumulate. White also proposed

4200-614: The charter was not ratified by the U.S. Senate . As a result, the ITO never came into existence. The less ambitious General Agreement on Tariffs and Trade (GATT) was adopted in its place. However, in 1995, the Uruguay Round of GATT negotiations established the World Trade Organization (WTO) as the replacement body for GATT. The GATT principles and agreements were adopted by the WTO, which

4284-420: The consequences of these policies for other countries and for the global economy . For instance, The IMF played a significant role in individual countries, such as Armenia and Belarus, in providing financial support to achieve stabilization financing from 2009 to 2019. The maximum sustainable debt level of a polity, which is watched closely by the IMF, was defined in 2011 by IMF economists to be 120%. Indeed, it

SECTION 50

#1732844728380

4368-452: The country will be able to rectify its macroeconomic and structural imbalances. In the judgment of the IMF, the adoption by the member of certain corrective measures or policies will allow it to repay the IMF, thereby ensuring that the resources will be available to support other members. As of 2004 , borrowing countries have had a good track record for repaying credit extended under the IMF's regular lending facilities with full interest over

4452-425: The creation of the IBRD (now part of the World Bank ) which would provide capital for economic reconstruction after the war. The IMF as agreed to at Bretton Woods was much closer to White's proposal than to Keynes's. The Articles of Agreement for the IMF and IBRD signed at Bretton Woods did not come into force until ratified by countries with at least 80 percent of the capital subscriptions ("quotas"). The threshold

4536-482: The decline in real World GDP per capita. Before April 2009, the IMF argued that a global annual real GDP growth rate of 3.0 percent or less was "equivalent to a global recession". By this measure, there were six global recessions since 1970: 1974–75, 1984–85, 1990–93, 1996, 2008–09, and 2018–19. Informally, a national recession is a period of declining economic output. In a 1974 New York Times article, Julius Shiskin suggested several rules of thumb to identify

4620-418: The detriment of others because they do not bear the full consequences of their actions—is mitigated through conditions rather than providing collateral; countries in need of IMF loans do not generally possess internationally valuable collateral anyway. Conditionality also reassures the IMF that the funds lent to them will be used for the purposes defined by the Articles of Agreement and provides safeguards that

4704-438: The duration of the loan. This indicates that IMF lending does not impose a burden on creditor countries, as lending countries receive market-rate interest on most of their quota subscription, plus any of their own-currency subscriptions that are loaned out by the IMF, plus all of the reserve assets that they provide the IMF. The IMF was originally laid out as a part of the Bretton Woods system exchange agreement in 1944. During

4788-577: The early 1970s. The Bretton Woods Conference recommended that participating governments reach agreement to reduce obstacles to international trade. The recommendation was later embodied in the proposed International Trade Organization (ITO) to establish rules and regulations for international trade . The ITO would have complemented the IMF and IBRD. The ITO charter was agreed on at the U.N. Conference on Trade and Employment (held in Havana , Cuba, in March 1948), but

4872-554: The end of March 2014, the IMF secured an $ 18 billion bailout fund for the provisional government of Ukraine in the aftermath of the Revolution of Dignity . In late 2019, the IMF estimated global growth in 2020 to reach 3.4%, but due to the coronavirus, in November 2020, it expected the global economy to shrink by 4.4%. In March 2020, Kristalina Georgieva announced that the IMF stood ready to mobilize $ 1 trillion as its response to

4956-450: The final acts adopted at Bretton Woods. British economist John Maynard Keynes , on the other hand, imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped governments and act as the United States government had during the New Deal to the great depression of

5040-422: The form of policy reform. If the conditions are not met, the funds are withheld. The concept of conditionality was introduced in a 1952 executive board decision and later incorporated into the Articles of Agreement. Conditionality is associated with economic theory as well as an enforcement mechanism for repayment. Stemming primarily from the work of Jacques Polak , the theoretical underpinning of conditionality

5124-482: The global lender of last resort to national governments, and a leading supporter of exchange-rate stability . Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade , promote high employment and sustainable economic growth, and reduce poverty around the world." Established in July of 1944 at the Bretton Woods Conference , primarily according to

SECTION 60

#1732844728380

5208-427: The ideas of Harry Dexter White and John Maynard Keynes , it started with 29 member countries and the goal of reconstructing the international monetary system after World War II . In its early years, the IMF primarily focused on facilitating fixed exchange rates across the developed world. It now plays a central role in the management of balance of payments difficulties and international financial crises. Through

5292-535: The largest borrowers from the IMF in order were Greece, Portugal, Ireland, Romania, and Ukraine. On 25 March 2013, a €10 billion international bailout of Cyprus was agreed by the Troika , at the cost to the Cypriots of its agreement: to close the country's second-largest bank ; to impose a one-time bank deposit levy on Bank of Cyprus uninsured deposits. No insured deposit of €100k or less were to be affected under

5376-551: The leader of the Mexican delegation. It was a venue for ideas that did not fall under the other two commissions. Each commission had a number of committees, and some committees had subcommittees. Every country at the conference was entitled to send delegates to all meetings of the commissions and the "standing committees", but other committees and subcommittees had restricted membership, to allow them to work more efficiently. Except when registering final approval or disapproval of proposals,

5460-413: The liquidation had been put aside. The need for post-war Western economic order was resolved with the agreements made on monetary order and open system of trade at the 1944 Bretton Woods Conference. These allowed for the synthesis of Britain's desire for full employment and economic stability and the United States' desire for free trade . The Bretton Woods system of pegged exchange rates lasted into

5544-529: The one suffered by Germany in the 1920s. The Versailles treaty imposed reparations on the country for the damages it caused in World War I , and hyperinflation greatly affected the German economy. Prices rose 41 percent per day.  In the autumn of 1923, 1 Dollar was worth about 4 trillion Marks, forcing the population to barter. Germany's subsequent economic turmoil led to its financial collapse and eventually to

5628-428: The organization's conditional loans. During the 20th century, the IMF shifted its position on capital controls. Whereas the IMF permitted capital controls at its founding and throughout the 1970s, IMF staff increasingly favored free capital movement from 1980s onwards. This shift happened in the aftermath of an emerging consensus in economics on the desirability of free capital movement, retirement of IMF staff hired in

5712-491: The organization's other member-states. This transparency is intended to facilitate international co-operation and trade. Since the demise of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has evolved largely by way of changes in procedures rather than through the adoption of new obligations. The Fund typically analyses the appropriateness of each member country's economic and financial policies for achieving orderly economic growth, and assesses

5796-477: The participating countries. They wanted to avoid the complications, faced during the interwar period , due to leaving the gold standard , the great depression , and trade wars that spread the depression globally. There would be a need for an entity that fostered equilibrium in exchange rates and prevented competitive devaluations while ensuring domestic policy autonomy for high employment and real income. Additionally, countries were concerned with crisis like

5880-549: The rise of Nazism and World War II , aligning with some of John Maynard Keynes's concerns in The Economic Consequences of the Peace , published in 1919. Thus, to prevent a new crisis in the post-war world, the world economies deemed it imperative to establish a system that fostered international economic cooperation. However, the U.S. and the U.K., the most influential parties in the conference, had not decided whether such

5964-409: The sovereignty of full UN member states, such as Aruba , Curaçao , Hong Kong , and Macao , as well as Kosovo . The corporate members appoint ex-officio voting members, who are listed below . All members of the IMF are also International Bank for Reconstruction and Development (IBRD) members and vice versa. Former members are Cuba (which left in 1964), and Taiwan , which was ejected from

6048-416: The system to balance the rebuilding of international capitalism with the maximization of national economic sovereignty and human welfare, also known as embedded liberalism . The IMF's influence in the global economy steadily increased as it accumulated more members. Its membership began to expand in the late 1950s and during the 1960s as many African countries became independent and applied for membership. But

6132-455: The systems: A 2021 study found that the IMF's surveillance activities have "a substantial impact on sovereign debt with much greater impacts in emerging than high-income economies". IMF conditionality is a set of policies or conditions that the IMF requires in exchange for financial resources. The IMF does require collateral from countries for loans but also requires the government seeking assistance to correct its macroeconomic imbalances in

6216-541: The terms of a novel bail-in scheme. The topic of sovereign debt restructuring was taken up by the IMF in April 2013, for the first time since 2005, in a report entitled "Sovereign Debt Restructuring: Recent Developments and Implications for the Fund's Legal and Policy Framework". The paper, which was discussed by the board on 20 May, summarised the recent experiences in Greece, St Kitts and Nevis, Belize, and Jamaica. An explanatory interview with deputy director Hugh Bredenkamp

6300-444: The work of the conference generally proceeded by negotiation and informal consensus rather than by formal voting. When voting occurred, each country had one vote. The main goal of the conference was to achieve an agreement on the IMF. Enough consensus existed that the conference was also able to achieve an agreement on the IBRD. Doing so required extending the conference from its original closing date of July 19, 1944 to July 22. Because

6384-471: The world, with total lost capital hovering at US$ 120 trillion. Countries in East Asia (including China ) have suffered smaller declines because their financial situations are more robust. They have benefited from falling commodity prices and they have initiated a shift toward macroeconomic policy easing. The IMF estimates that global recessions occur over a cycle lasting between eight and ten years. During what

6468-593: Was at this number that the Greek government-debt crisis started in 2010. In 1995, the International Monetary Fund began to work on data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public. The International Monetary and Financial Committee (IMFC) endorsed the guidelines for the dissemination standards and they were split into two tiers: The General Data Dissemination System (GDDS) and

6552-456: Was charged with administering and extending them. John Maynard Keynes first proposed the ICU in 1941, as a way to regulate the balance of trade. His concern was that countries with a trade deficit would be unable to climb out of it, paying ever more interest to service their ever-greater debt, and therefore stifling global growth. The ICU would effectively be a bank with its own currency (the " bancor "), exchangeable with national currencies at

6636-540: Was more than half the size of their permitted overdraft, obliging them to increase their currency values and export more capital. If at the year's end, their credit exceeded the maximum (half the size of the overdraft in surplus), the surplus would be confiscated. Lionel Robbins reported that "it would be difficult to exaggerate the electrifying effect on thought throughout the whole relevant apparatus of government ... nothing so imaginative and so ambitious had ever been discussed". However, Harry Dexter White , representing

6720-594: Was originally primarily intended to facilitate settling financial obligations arising from the peace treaties that concluded the First World War . During the Second World War, it helped the Germans transfer assets from occupied countries. Moreover, now that IMF was to be established, the BIS seemed to be superfluous. Commission III of the Bretton Woods Conference, therefore, considered Norway's proposal for "liquidation of

6804-483: Was published a few days later, as was a deconstruction by Matina Stevis of The Wall Street Journal . In the October 2013, Fiscal Monitor publication, the IMF suggested that a capital levy capable of reducing Euro-area government debt ratios to "end-2007 levels" would require a very high tax rate of about 10%. The Fiscal Affairs department of the IMF, headed at the time by Acting Director Sanjeev Gupta, produced

6888-595: Was reached on December 27, 1945. The institutions were formally organized at an inaugural meeting in Savannah, Georgia , on March 8–18, 1946. Notably absent from Savannah was the USSR , which had signed the Bretton Woods Final Act but had then decided not to ratify it, rejecting the inclusion of the dollar alongside gold and citing that the institutions they had created were "branches of Wall Street". The USSR never joined

6972-582: Was readmitted in 1990, after the Velvet Revolution . Apart from Cuba, the other UN states that do not belong to the IMF are Monaco and North Korea . Liechtenstein became the 191st member on 21 October 2024. Any country may apply to be a part of the IMF. Post-IMF formation, in the early postwar period, rules for IMF membership were left relatively loose. Members needed to make periodic membership payments towards their quota, to refrain from currency restrictions unless granted IMF permission, to abide by

7056-575: Was the "monetary approach to the balance of payments". Some of the conditions for structural adjustment can include: These conditions are known as the Washington Consensus . These loan conditions ensure that the borrowing country will be able to repay the IMF and that the country will not attempt to solve their balance-of-payment problems in a way that would negatively impact the international economy . The incentive problem of moral hazard —when economic agents maximise their own utility to

#379620