IMF

Question 1

Establishment

Answer 1

• 1945
• Washington
• legacy of the Bretton Woods system
• agency of the UN
• 189 members

Question 2

IMF roles

Answer 2

• survailence
• capacity development
• lending
• policy

Question 3

Surveilence as an IMF role

Answer 3

• monitors the system of exchange rates and international payments
• this allows countries to do business with each other

Question 4

Capacity development as an IMF role

Answer 4

• gives policy advice to members on financial matters

Question 5

Lending as an IMF role

Answer 5

• primarily to the developing world
• IMF loans have helped post communist states liberalise their markets and economically develop

Question 6

how does policy setting work

Answer 6

• 85 percent majority to pass
• vote share based on economy size eg USA has 16.5 percent of the vote share

Question 7

strengths

Answer 7

• effective in the 50s and 60s as there was huge economic stability and economic growth of countries was 4-5 percent a year
• bailed counters out in the 2008 crisis
• monitoring helps prevent global financial crisis

Question 8

weaknesses

Answer 8

• dominated by the USA, headquarters in Washington
• the USA essentially has veto power
• failed to predict 2008

Question 9

Loan example

Answer 9

• 2010 Eurozone crisis
• gave Ireland a €22.5 billion loan

Question 10

debt relief example

Answer 10

• debt relief/suspension has helped countries like Ghana and Ethiopia manage debt