International Monetary Fund - Essay Example

The International Monetary Fund (IMF) is an inter-governmental organization which was established to endorse international money cooperation, systematic exchange arrangements and exchange stability. The International Monetary Fund (IMF) offers the technical and financial assistance to its members in different areas of economic policy–basically in the field of exchange rates, fiscal, monetary and financial sector policies (The World Economy, “The International Monetary Fund”). Overview of the International Monetary Fund (IMF) The International Monetary Fund (IMF) was established in July 1944, under the ‘Bretton Woods System’ which comprised of three international organizations, those were: The International Monetary Fund (IMF): It was established with a purpose of developing International Monetary Cooperation.

The International Bank of Reconstruction and Development: This was established with a motive of International Development Assistance and Investment. The International Trade Organization: It was established with a motive to develop International Trade. The above three components of The Bretton Woods System were entertained in the context of war, high unemployment, depression, hyper inflation and high fluctuating exchange rates which effected the global economy in the 1930s (Sykes, “Organisational Information”). . Surveillance Consultations: Consultations concluded for 120 countries in FY 2010 and for 88 countries in FY 2011 as on 11/02/2011 (The International Monetary Fund, “The IMF at a Glance”).

The IMF’s governing body essentially, is the board of governors. Each state is being represented by their respective elected governor (member of the Board of Governor, IMF). The IMF’s executive board is its executive body, and is comprised of 24 Executive Directors; each of them is either elected or appointed by the members. The executive board of the IMF is responsible for regulating the smooth flow of business of the organization. There are two committees, the International Monetary and Financial Committee and the Development Committee which are appointed by the Board of Governors (Sykes, “Organisational Information”).

Merits and De–Merits The IMF has executed many reforms till date, it has been designed to strengthen its network and improve its capability to perform well and serve its membership efficiently. The IMF has rapidly become an open and transparent organization; it has also inculcated transparency among its membership. Moreover, it is also working to strengthen its economic governance. These aspects have been undertaken through promoting the use of codes and standards as a medium for better financial management, economic and corporate governance.

The IMF is also working to safeguard the integrity and stability of the International Financial System globally. More specifically, the IMF, the World Bank along with the Financial Sector Assessment Program (FSAP) perform together to strengthen the combat money laundering sectors along with the financial sectors in member countries. The International Monetary Fund (IMF) is an