Difference between the International Monetary Fund (IMF) and World Bank
The IMF and world bank are institutions that help in global economic crisis, helps in poverty alleviation and provide funds for development of social amenities. These two institutions are so closely link that both of them have their headquarters are close to each other across the street at Washington. But here are the differences between them.
What's Difference between IMF and World Bank?
It all started at a hotel in new himpshow in July 1944 where 44 countries gathered for bretton wood conference. The goal of the conference was to agree on a new frame work for the international monetary system which is the rules and institutions which keeps the global economy running smoothly. After the world war II, most people agreed that the old system had failed, After 3 weeks of negotiation at bretton woods, especially between John Maynard keyes who was representing the United kingdom and Harry Dexter Whites, the US Treasury representative, an agreement was reached. The agreement created the International Monetary Fund (IMF) and World Bank. Each institution was given a distinct role.
The IMF job was to oversee a system of fixed exchange rate which tied the value of a country's currency to the US dollars and perked to Gold. The main purpose of this was to make sure exchange rate remain stable to encourage global trade. The IMF was also tasked with providing short term loans to countries that are struggling to pay their debt.
Meanwhile,the main goal of the world bank was to give financial assistance to countries mainly in Europe that needed to rebuild after the war.
Today, the roles of IMF and World bank has changed a lot since the days of bretton woods. President Nickson unperked the US Dollars from Gold in 1971 essentially dissolving the fixed exchange rate which the IMF oversaw. Since then, the IMF has taken on a bigger role fighting financial crises all over the world. It keeps tab on the global economy and put economics policies in place in member countries. World bank focuses on development and reducing poverty. It provides funding, resources and project in some of the poorest countries in the world.
The IMF is funded by member countries mainly by quotas. It receives $675 billion in quotas with the US, Germany, Japan, China contributing the most while the world bank is financed mainly by issuing bonds to global investors. The IMF biggest borrowers are greece, Portugal, ukriane and pakistan and world bank carries out most of it's project in Africa and Asia. Both institutions promote global economic stability. They make countries less vulnerable to crisis, enhnace standard of living.
What's Difference between IMF and World Bank?
It all started at a hotel in new himpshow in July 1944 where 44 countries gathered for bretton wood conference. The goal of the conference was to agree on a new frame work for the international monetary system which is the rules and institutions which keeps the global economy running smoothly. After the world war II, most people agreed that the old system had failed, After 3 weeks of negotiation at bretton woods, especially between John Maynard keyes who was representing the United kingdom and Harry Dexter Whites, the US Treasury representative, an agreement was reached. The agreement created the International Monetary Fund (IMF) and World Bank. Each institution was given a distinct role.
The IMF job was to oversee a system of fixed exchange rate which tied the value of a country's currency to the US dollars and perked to Gold. The main purpose of this was to make sure exchange rate remain stable to encourage global trade. The IMF was also tasked with providing short term loans to countries that are struggling to pay their debt.
Meanwhile,the main goal of the world bank was to give financial assistance to countries mainly in Europe that needed to rebuild after the war.
Today, the roles of IMF and World bank has changed a lot since the days of bretton woods. President Nickson unperked the US Dollars from Gold in 1971 essentially dissolving the fixed exchange rate which the IMF oversaw. Since then, the IMF has taken on a bigger role fighting financial crises all over the world. It keeps tab on the global economy and put economics policies in place in member countries. World bank focuses on development and reducing poverty. It provides funding, resources and project in some of the poorest countries in the world.
The IMF is funded by member countries mainly by quotas. It receives $675 billion in quotas with the US, Germany, Japan, China contributing the most while the world bank is financed mainly by issuing bonds to global investors. The IMF biggest borrowers are greece, Portugal, ukriane and pakistan and world bank carries out most of it's project in Africa and Asia. Both institutions promote global economic stability. They make countries less vulnerable to crisis, enhnace standard of living.
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