Roles of International Financial Institutions

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Roles of International Financial Institutions Marcus Jenkins MGT448 January 10, 2011 Paul Bogert Introduction When listening to the latest television report concerning global business news or world economics, names of financial institutions such as World Bank, International Monetary Funds, and Asian Development Bank may be the center of some discussion. A major player on the global forefront, international financial institutions function much differently from local neighborhood banks. In this paper the author will define the roles of international financial institutions and explain the role international financial institutions play in global financing operations. Also the author describes how international financial…show more content…
However, the main objectives of international financial institutions are to alleviate poverty, increase economic growth, and protect the environment. In order to carry out these objectives these international financial institutions are working with governments and governmental agencies. They have provided loans for public sector projects or programs, technical assistance and policy-based lending. These international financial institution loans come with a guarantee by the borrowing states. However, in the new economic environment, the importance of international financial institutions as source of funds has decreased and the role of the private sector has increased. According to Buiter and Lankes (2002), “since the importance of international financial institutions as a source of funds has decreased while the potential role of the private sector has increased, a central challenge for international financial institutions is to find ways of fostering development through expanding opportunities for the private sector. They should view the private sector as a prime vehicle for the achievement of development goals. In so doing they must seek to ensure that the poor participate in the growth process and that growth is environmentally sustainable.” Because the international financial institutions are the institutions that offer the
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