This is my academic work on the IMF.

1. The International Monetary Fund
“an organizational perspective”
presented by
James L. Adams
Western International University
INB 605 Structure of the Global Economy
Instructor: Professor Robert Lambert
July 30, 2008

2. The IMF Organizational
Background
History March 31, 2008
• IMF was founded by John Maynard • Headquartered: Washington,
Keynes and 44 charter nations DC
during the United Nations Monetary • Member nations: 185
and Financial Conference in July • Employees: 2600
1944 as the Bretton Woods
Institution. • Funds Available: $209.5 billion
• Headquartered: Bretton Woods, • Loans Outstanding: $16.1 billion
New Hampshire • 64 Countries owe the IMF (total)
• Recognized in December 27, 1947 • 56 Countries are low-income
as the International Monetary Fund owed $6.5 billion
with 29 of the 44 members • 8 Countries (are not low-
remaining. income) owed $9.6 billion

3. Purpose of the IMF
IMF Agenda 3 Primary Tasks of IMF
• Facilitate global monetary • Surveillance
exchange • Monitoring financial & economic
• Promote exchange stability activities to develop policies,
strategies & recommendations for
• Organize exchange arrangements proactive crisis prevention.
• Foster economic growth • Lending
• Enhance higher employment • Funding for short-term, low-interest
• Provide temporary financial loans for macroeconomic issues
assistance related to political & economic
stability.
• Provide training & advice for
• Technical Assistance
balance of payment issues
• Training & consultation for loan
applications, policy reforms and the
interpretation of data.

4. Surveillance
Multi-lateral (Macro-economic) Bi-Lateral (Micro-economic)
• Annual evaluation process for • Economist visit member states
all member nations based on individually to gather
their financial expert information from the nation’s
assessments of economic and central bank and officials, and
financial developments. conduct meetings pertaining to
• Reason: To assess that nation’s economy.
vulnerabilities, threats, trends • The Economist then submit
and developments in the whole formal reports to the Executive
international economy. Board of the IMF.
• The Executive Board makes
recommendations to the
central bank officers and file a
transparent Public Information
Notice of the data.
• Reason: To ensure compliance
with the Articles of Agreement.

5. Lending
The Lending Process
2. Any member of the IMF may request funding.
3. Agree to abide by the transparency standards, codes and
policies of the facility.
4. Agree to a balance of payment resolution.
5. Bi-lateral Surveillance is conducted on current economic
conditions.
6. Submit a repayment strategy including the policy change
recommendations in a Letter of Intent to the Executive Board
of the IMF for approval.
Poverty Reduction & Growth Facilities and Exogenous Shock
Facilities
are loans programs for impoverished nations with concessional
interest rates (about 0.5%) with special terms and grace periods
for repayment.

6. Facilities
Facilities are loan programs set-up by the IMF to address specific needs of member
nations. It should also be noted that IMF funding is disbursed in phases so that
adjustments may be made to mitigate risk.
Facility Purpose Type Duration Repay Surcharge
Stand By Arrangements BoP Short- 1 – 2 yrs 2 - 4 yrs Avg 4%
(Most lucrative loan.) term
Extended Fund Facility BoP Long- 3 yrs 5 – 7 yrs
(Recommended Reforms) Term
Supplemental Reserve Economic Short- 1 yr 1 – 1.5 Avg 4%
Facility Recovery term yrs
(Developing Nations) Large-
scale
Compensatory Financing Drop in Short- 1 – 2 yrs 2 - 4 yrs
financing
Facility Export term
(Global Commodity Price Earnings
Issues)
Emergency Assistance Disaster Long-term 3 - 5 yrs
Loans Recovery (Base
(Disasters & Post-War) Rate)
(Subsidies may be
available)

7. Technical Assistance
• 1/5 th of IMF Budget goes to Technical Assistance
• Missions can be dispatched from Headquarters to train
central bank executives and officials.
• Online courses are provided for members to train.
• Seminars & Workshops
• Seven Regional Training Institutes located worldwide.
• Asian Development Bank, African Regional Bank and
others provide multi-lateral funding.
• The goal is to educate to empower financial leaders in an
effort to sustain and grow a strong international economy.

8. Funding Process Overview
1. Member nation identifies a need from surveillance
& evaluation data.
2. Implementation of policy changes and
recommendations for compliance.
3. File Letter of Intent.
4. Monitor the use of phased funding and economic
conditions, watching expenditures, growth and
lowering of BoP.
5. Evaluation of previous disbursements, economic
trends, growth and impact to correct problem.
6. Reassess and resolve unforeseen results due to
policy changes, economic conditions and external
factors.

9. Distinctions – IMF & World Bank
• Both were created due to a difference in financial labor and
responsibility.
• World Bank
• Funds individual projects to serve the public good such as dam
construction, roads and other infrastructure related projects.
• Makes longer-term loans.
• Requires IMF Membership.
• International Monetary Fund
• Does not issue funds for individual projects.
• Focuses on BoP issues.
• Provides facts, statistics and information.

10. The Future of the IMF
• Surveillance has been broadened to include capital markets
and investments.
• Transparency Standards & Codes have been enhanced in
banking supervision, accounting and many aspects of the
global financial infrastructure to thwart terrorist activities
through money laundering and illicit use of the international
financial system.
• Member nations will face challenges in trying to adhere to
policies and apply and ratify them in their own countries.
• Membership will expand with nations rising in status and
assuming more financial responsibility.

11. THE END
QUESTIONS?