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INTERNATIONAL MONETARY FUND

This research provides an overview of the International Monetary Fund (IMF). Covered in this overview is the historical development that prompted the creation of the organization, the founding of the IMF, membership requirements, the role of the IMF in the enhancement of international trade, and current activities of the organization to include some financial statistics.

The impetus for the creation of the IMF was provided by events which staggered the international economy from 1929 to the beginning of the Second World War (Horsefield, 1992, p. 5). Attempting to maintain domestic economic stability and retain international market positions during this time period, most countries engaged in competitive devaluations, foreign exchange controls, and import restrictions (Driscoll, 1994, p. 1). The disastrous consequences of these actions resulted in a near universal recognition of a need to establish some sort of mechanism through which international economic stability could be both created and maintained (Heller, 1993, p. 51).

Following international negotiation on such a mechanism during the period of the Second World War, the Bretton Woods Agreement of 1944 created the IMF (Driscoll, 1994, p. 2). The institution became a reality in December 1945, when the thirtieth nation signed the Agreement. Actual financial operations were commenced by the IMF in early1947 (Heller, 1993, p. 65).

The Bretton Woods Agreement actually created two international financial institutions. The first was the IMF, an organization charged with responsibilities to encourage international monetary cooperation and the removal of foreign exchange restrictions, stabilize of currency exchange rates, and facilitate multilateral payments between member countries (Heller, 1993, p. 70). The second institution created was The International Bank for Reconstruction and Development, more commonly known as The World Bank (Katz, 1990, p. 2). The World Bank's ...

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INTERNATIONAL MONETARY FUND. (1969, December 31). In LotsofEssays.com. Retrieved 07:16, October 25, 2014, from http://www.lotsofessays.com/viewpaper/1696223.html