The IMF at a Glance
Why the IMF was created and how it works
The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
The IMF's responsibilities: The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
- Membership: 188 countries
- Headquarters: Washington, D.C.
- Executive Board: 24 Directors each representing a single country or a group of countries
- Staff: Approximately 2,600 from 147 countries
- Total quotas: US$327 billion (as of 3/13/15)
- Additional pledged or committed resources: US$ 885 billion
- Committed amounts under current lending arrangements (as of 3/13/15): US$163 billion, of which US$137 billion have not been drawn (see table).
- Biggest borrowers (amounts outstanding as of 3/13/15): Portugal, Greece, Ireland, Ukraine
- Biggest precautionary loans (amount agreed as of 3/13/15): Mexico, Poland, Colombia, Morocco
- Surveillance consultations: 122 consultations in 2013 and 129 in 2014
- Technical assistance: 274 person years in FY2013 and 285 in FY2014
- Original aims:
- promote international monetary cooperation;
- facilitate the expansion and balanced growth of international trade;
- promote exchange stability;
- assist in the establishment of a multilateral system of payments; and
- make resources available (with adequate safeguards) to members experiencing balance of payments difficulties.
The IMF’s fundamental mission is to ensure the stability of the international monetary system. It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to members.
The IMF oversees the international monetary system and monitors the economic and financial policies of its 188 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
A core responsibility of the IMF is to provide loans to member countries experiencing actual or potential balance of payments problems. This financial assistance enables countries to rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while undertaking policies to correct underlying problems. Unlike development banks, the IMF does not lend for specific projects.
The IMF helps its member countries design economic policies and manage their financial affairs more effectively by strengthening their human and institutional capacity through technical assistance and training. The IMF aims to exploit synergies between technical assistance and training—which it calls capacity development—to maximize their effectiveness.
Organization & Finances
The IMF has a management team and 17 departments that carry out its country, policy, analytical, and technical work. One department is charged with managing the IMF’s resources. This section also explains where the IMF gets its resources and how they are used.
The IMF has a Managing Director, who is head of the staff and Chairperson of the Executive Board. The Managing Director is appointed by the Executive Board for a renewable term of five years and is assisted by a First Deputy Managing Director and three Deputy Managing Directors.
The IMF’s employees come from all over the world; they are responsible to the IMF and not to the authorities of the countries of which they are citizens. The IMF staff is organized mainly into area; functional; and information, liaison, and support responsibilities.
Most resources for IMF loans are provided by member countries, primarily through their payment of quotas.
Quota subscriptions are a central component of the IMF’s financial resources. Each member country of the IMF is assigned a quota, based broadly on its relative position in the world economy.
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
Gold remains an important asset in the reserve holdings of several countries, and the IMF is still one of the world’s largest official holders of gold.
While quota subscriptions of member countries are the IMF's main source of financing, the Fund can supplement its quota resources through borrowing if it believes that they might fall short of members' needs.
The IMF has evolved along with the global economy throughout its 70-year history, allowing the organization to retain a central role within the international financial architecture.
Unlike the General Assembly of the United Nations, where each country has one vote, decision making at the IMF was designed to reflect the relative positions of its member countries in the global economy. The IMF continues to undertake reforms to ensure that its governance structure adequately reflects fundamental changes taking place in the world economy.
Created in 1945, the IMF is governed by and accountable to the 188 countries that make up its near-global membership.
The Fund actively promotes good governance within its own organization.
The IMF has played a part in shaping the global economy since the end of World War II.
As the Second World War ends, the job of rebuilding national economies begins. The IMF is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate exchange restrictions that hinder trade.
After the system of fixed exchange rates collapses in 1971, countries are free to choose their exchange arrangement. Oil shocks occur in 1973–74 and 1979, and the IMF steps in to help countries deal with the consequences.
The oil shocks lead to an international debt crisis, and the IMF assists in coordinating the global response.
The IMF plays a central role in helping the countries of the former Soviet bloc transition from central planning to market-driven economies.
The implications of the continued rise of capital flows for economic policy and the stability of the international financial system are still not entirely clear. The current credit crisis and the food and oil price shock are clear signs that new challenges for the IMF are waiting just around the corner.