Christine Lagarde, the finance minister of France, is set to begin her five-year term as the International Monetary Fund's managing director and chairman next month after defeating Mexican Central Bank chief Agustin Carstens. Lagarde was backed by the United Kingdom, Germany, and most European powers, as well as some Asian and African nations. The United States Treasury Secretary Tim Geithner joined the group of supporters right before Lagarde was voted in (Rooney).
"Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," Geithner said (Rooney). .
Lagarde will succeed Dominque Strauss-Kahn, who was recently arrested in New York for sexual assault. Lagarde is the first woman to hold this position and was selected by a consensus vote (Rooney),.
"I am deeply honored have the trust placed in me by the Executive Board. I would like to thank the Fund's global membership warmly for the broad-based support I have received. I would also like to express my respect and esteem for my colleague and friend, Agustin Carstens," she said (Rooney). .
The global financial institution desperately needed a new leader because of their involvement with the European Union and the European Central Bank to provide financial support to Greece and other troubled European economies who need immediate help (Rooney). .
Lagarde is already involved in these affairs. While in Paris, she advised the Greek government to come to terms with the political differences that exist and approve the austerity measures that are currently preventing the country from receiving their next installment loans from the IMF and EU. Additionally, she lectured Greece's creditors, which consist mostly of French and German banks, on their ability to compromise (Rooney).
"It must be done in a concerted, collective way," she said.
By this change in policy, the IMF actually has more control, now the IMF has intimate knowledge of other country's economic systems. ... The IMF as an organization does several things. ... The nations involved with the IMF reap many benefits. ... The quotas mandatory to join the IMF now becomes the savior. ... If that amount is not sufficient to cover the debt, other options become available to the country. ...
Developing countries turn to the IMF for financial assistance in times of foreign-exchange shortfalls. While they receive this assistance, in accordance with the IMF Articles of Agreement, they are often called upon as a precondition of this assistance to undertake economic reforms proposed by IMF staff. ... At the other extreme is the view that if the IMF did not exist, it would have to be invented. ... Obviously, it would be unfair to blame the IMF for these pre-existing bad conditions. ... Another area where consensus has been indicated relates to the purposes for which the IMF can lend ...
The IMF (International Monetary Fund) is an independent organization. ... The lending process of the IMF is quite different from that of a traditional loan. ... In most cases the letter of intent is drafted and signed by the member country and only requires the approval of the Managing Director. ... Internal Review of the Letter of Intent The drafted letter of intent is then passed to the Fund's Managing Director for approval, the Director will decide whether the terms are acceptable based on comments from senior staff and the letter will then be sent to the Executive Board. ... The...
The money the IMF and the World Bank lend to debtor countries comes with strings attached. ... The IMF when it came to dealing with developing countries, IMF's process has too often focused on narrow macroeconomic objectives at the expense of broader human development. The World Bank and IMF have become immensely powerful institutions in Africa due to the economic crisis that hit the developing world in the late 1970s and early 1980s. ... The World Bank and IMF used this leverage to force economic policies to African countries. ... The role of the World Bank and IMF in this international ...
The IMF said that its "fiscal advice to member countries, including those with IMF-supported programs, has been continually reviewed and adjusted as needed. ... Even if the country still continues to be in debt, as this time they'll be in debt to the IMF, at least the IMF lessened the country's burden of having to pay a larger amount of money. ... In theory, IMF credit is meant to increase reserves. ... Instead of being able to consider the advices the IMF gives and then later on deciding, the member countries have to readily comply with what the IMF dictates. ... The existence of t...
The IMF was created in 1945 with relatively limited functions and authority. ... This results from having the IMF as both short term and long term lender. ... At that point, macroeconomic concerns should become only one factor along with growth, poverty reduction and public education. This may require the World Bank rather than the IMF to administer long term loans while the IMF maintains its core competence in crisis lending and restoring macroeconomic stability. ... Adequate empirical evidence of moral hazard resulting from IMF loans seems wanting. ...
At the end of World War II, several international institutions were created to manage the world economy and prevent another Great Depression. ... At the start, there was a membership of 29 countries, but it has now become almost universal with 184 members (Milner 2005, p.9). ... These changes ultimately made the IMF very similar to the World Bank. ... He concludes that this result either means that the IMF's policy prescriptions are inaccurate or economic growth and poverty reductions are simply not goals of the IMF. ... The lending programs that the IMF and the World Bank...
The World Bank and the International Monetary fund (IMF) are both international institutions created at the Bretton Woods Agreement of 1944 to help reconstruct Europe after the Second World War. ... The reason why this crisis will not be the main focus of my attention despite the fact that it had devastating consequences and led the 1980's to become known in Latin America as "the lost decade" because of the severe deterioration of economic growth and quality of life that it suffered is that the crisis is no longer a significant international phenomenon given that almost 80 percent of the ...
Our society has become interdependent with each other in many ways through things like trade, technology, culture, and immigration. ... For finance, I will talk about the World Bank and the International Monetary Funding (IMF) to prove that globalization made economic superpowers affect the world positively because most nations are economically interdependent. ... However, to become a superpower, Korea realized that it needed to start by exporting cheap goods to build its economy (Doner, Ritchie, Slater, 2005). ... By modeling these things after developed countries, developing countries can ha...
