Final Exam Flashcards
(53 cards)
The IMF’s capacity development efforts focus on:
• Public Finances
• Monetary and Financial Policies
• Macroeconomic Frameworks and Tools
• Legal Frameworks
• Statistics
The IMF issues an international reserve asset known as this, that can supplement the official reserves of member countries participating in the this Department.
(currently all members of the IMF).
Special Drawing Rights
Member quotas are the primary source of
IMF financial resources. A member’s quota
broadly reflects its size and position in the
world economy.
• Credit arrangements between the IMF and a group of members and institutions provide supplementary resources.
• As a third line of defense, member countries have also committed resource to the IMF through bilateral borrowing agreements (BBAs)
Resources
Governance and Organization primary aims to
• Promote international monetary cooperation;
• Facilitate the expansion and balanced growth of
international trade;
• Promote exchange stability;
• Assist in the establishment of a multilateral system of payments; and make resources available
(with adequate safeguards) to members
experiencing balance-of-payments difficulties
An international organization
dedicated to providing financing, advice, and
research to developing nations to aid their economic advancement.
World Bank
Currently, the World Bank has two stated goals that it aims to achieve by 2030.
- The first is to end extreme poverty by decreasing the number of people living on less than $1.90 a day to below 3% of the world population.
- The second is to increase overall prosperity by increasing income growth in the bottom 40% of every country in the world.
• To end extreme poverty and boost prosperity on a livable planet.
Mission of world bank
The world bank is made up of how many member countries?
189
What are the sectors of world bank?
the International Bank of Reconstruction
and Development (IBRD), the International
Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral
Investment Guarantee Agency (MIGA).
The only global international organization dealing with the rules of trade between nations.
• The overall objective of this is to help its members use trade as a means to raise living standards, create jobs and improve people’s lives
World Trade Organization
How many member countries in WTO?
164
Is the growing connectivity of financial
institutions and markets around the world. It refers to the increasing of flow of capital,
investment, and financial services across
countries, which is made possible by
technological improvements, deregulation,
and globalization. This process has farreaching ramifications for economic growth, stability, and policymaking at the national and international levels.
Global Financial Integration
What are the potential benefits of Global Financial Integration?
- Access to a broader range of investment opportunities
- diversification of risks
- potentially higher economic growth through increased capital flows
World Capital Markets may allow a country to engage in this allowing the countries to borrow in bad times and lend in good times.
Consumption Smoothing
The ability to draw upon the international pool of resources that financial openness gives access to may also affect this . FDI may facilitate the transfer or diffusion of managerial and
technological know-how-particularly in the form of new varieties of capital inputs and improve the skills composition of the labor force as the result of “learning by doing” effects, investment in formal education and on-the-job training.
Domestic Investment and Growth
The free flow of capital across borders can encourage countries to adopt more disciplined microeconomic policies and reduce the frequency of policy mistakes, by increasing the reward for good policies and penalizing bad ones.
Enhanced Macroeconomic Discipline
It improves the efficiency of banking
operations by optimizing procedures, reducing costs, and improving services. Financial stability refers to a system’s ability to maintain smooth operation while absorbing shocks. Increased efficiency allows banks to operate more smoothly,
reduce risks, and contribute to overall financial stability
Increased Banking System Efficiency and
Financial Stability
Examples for Increased banking system efficiency include
- Faster transaction processing times
- Improved customer experience
- Cost-saving measures
banks utilize sophisticated risk management tools to diversify their lending portfolios, reducing the concentration of risk in any single sector or asset class.
Diversification of Risk
banks develop comprehensive these to address potential crises or disruptions in the financial markets.
Contingency Planning
What are the potential cost of concentration of Capital Flows and Lack of Access?
- High degree of concentration capital flows and lack of access to financing for smaller countries
The capital inflows that are associated with an open capital account may raise domestic investment, their impact on long-run growth may be limited (if non negligible) if such inflows are used to finance speculative or low-quality domestic investments
Domestic Misallocation of Capital Flows
difficulty and cost of pursuing aggressive sterilization policies
Rapid Monetary Expansion
effect on capital inflows on domestic spending
Inflationary Pressures
