What is the difference between the IMF and the World Bank?
Despite these and other similarities, however, the Bank and the IMF remain distinct. The fundamental difference is this: the Bank is primarily a development institution; the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations.
The World Bank Group works with developing countries to reduce poverty and increase shared prosperity, while the International Monetary Fund serves to stabilize the international monetary system and acts as a monitor of the world's currencies.
- IMF primarily is in existence to deal with economic crises from occurring. Monitor exchange rates to prevent complete economic meltdowns. - World bank is aimed towards development. Many developing states often have have trouble getting $$$ for development so it provides them with loans.
The organizations that make up the World Bank Group are owned by the governments of member nations, which have the ultimate decision-making power within the organizations on all matters, including policy, financial or membership issues.
The countries that are not a part of the IMF are Cuba, North Korea, Monaco, Taiwan, Vatican City, and East Timor Liechtenstein.
The IMF provides financial assistance and works with governments to ensure responsible spending. The IMF offers various types of loans that are tailored to countries' different needs and specific circ*mstances. Loans to low-income countries carry a zero interest rate.
How is the IMF financed? The IMF's resources mainly come from the money that countries pay as their capital subscription (quotas) when they become members. Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy.
The World Bank is an international development organization owned by 187 countries. Its role is to reduce poverty by lending money to the governments of its poorer members to improve their economies and to improve the standard of living of their people.
Together, IBRD and IDA form the World Bank, which provides financing, policy advice, and technical assistance to governments of developing countries. IDA focuses on the world's poorest countries, while IBRD assists middle-income and creditworthy poorer countries.
Well they are both owned and directed by the government of member nations involved in coming together in creating an avenue in that strengthening and broadening the growth of each member state which is the of the upper most.
Who is the biggest borrower of the IMF?
| Member | Total IMF Credit Outstanding as of 03/31/2024 | Total IMF Credit Outstanding as of 04/18/2024 |
|---|---|---|
| Argentina | 32,450,000,000 | 32,450,000,000 |
| Armenia, Republic of | 257,725,848 | 257,725,848 |
| Bahamas, The | 114,000,000 | 114,000,000 |
| Bangladesh | 1,353,626,550 | 1,353,626,550 |
The Secretary of the Treasury serves as the U.S. Governor to the IMF, and the U.S. Executive Director of the IMF is one of 24 directors who exercise voting rights over the strategic direction of the institution. The U.S. is the largest shareholder in the Fund.
Although the Bank and IMF are distinct entities, they work together in close cooperation. This cooperation, present since their founding, has become more pronounced since the 1970s.
*Previous years show outstanding debt as of September 6 2022 and March 31 2023. Argentina is the biggest debtor to the IMF, with a total outstanding debt of $42.9bn.
The organizations that make up the World Bank Group are owned by the governments of member nations. They make decisions on all matters, including policy, financial or membership issues.
The impact of IMF loans has been widely debated. Opponents of the IMF argue that the loans enable member countries to pursue reckless domestic economic policies knowing that, if needed, the IMF will bail them out. This safety net, critics charge, delays needed reforms and creates long-term dependency.
India takes the top spot. Its $39.7bn debt towards the WB recorded at the end of 2021 is double that of the next biggest debtor, Indonesia, with $19.6bn.
The Executive Board (the Board) is responsible for conducting the day-to-day business of the IMF. It is composed of 24 Directors, who are elected by member countries or by groups of countries, and the Managing Director, who serves as its Chairman. The Board usually meets several times each week.
Limited resources: The IMF has limited resources, which can limit the amount of assistance it can provide to countries in need. Stigmatization: Bailout can stigmatize a country in the eyes of international investors, signaling that the country is unable to manage its own economy without outside assistance.
How much does the US pay the IMF?
The United States contributes $117 billion to the IMF quota (17.46%). In addition, the United States has contributed $44 billion to funds at the IMF that supplement quota resources. As of February 11, 2022, the IMF had total lending commitments around $239.2 billion.
The IMF functions as a co-op that is funded by, governed by, and accountable to its 190 member countries (of the world's total 195 countries). The U.S. is the largest contributor to and shareholder in the Fund.
Lack of Transparency and Accountability: The World Bank has also been criticized for its lack of transparency and accountability. Critics argue that the Bank has not been transparent in its decision-making processes, and that it has not adequately engaged with civil society and other stakeholders in its operations.
| Rank by Asset Size | Bank Name | Total Assets |
|---|---|---|
| 1. | Chase Bank | $3.38 trillion |
| 2. | Bank of America | $2.45 trillion |
| 3. | Wells Fargo | $1.7 trillion |
| 4. | Citibank | $1.68 trillion |
The five United Nations member states that are not members of the World Bank are Andorra, Cuba, Liechtenstein, Monaco, and North Korea. Kosovo is not a member of the UN, but is a member of the IMF and the World Bank Group, including the IBRD and IDA.
