International financial institutions, or IFIs, refers to financial institutions that
have been established (or chartered) by more than one country, and hence are
subjects of international law. Their owners or shareholders are generally national
governments, although other international institutions and other organizations
occasionally figure as shareholders. The most prominent IFIs are creations of
multiple nations, although some bilateral financial institutions (created by two
countries) exist and are technically IFIs. Many of these are multilateral
development banks.
The best-known IFIs are the World Bank, the IMF, and the regional development
banks. Some of the IFIs are considered UN agencies.
Types of IFIs
Bretton Woods institutions
The best-known IFIs were established after World War II to assist in the
reconstruction of Europe and provide mechanisms for international cooperation in
managing the global financial system. They include the World Bank, the IMF and
the International Finance Corporation.
Regional development banks
The regional development banks consist of several regional institutions that have
functions similar to the World Bank group's activities, but with particular focus on
a specific region. Shareholders usually consist of the regional countries plus the
major donor countries. The best-known of these regional banks cover regions that
roughly correspond to United Nations regional groupings, including the Inter-
American Development Bank (which works in the Americas, but primarily for
development in Latin America and the Caribbean); the Asian Development Bank;
the African Development Bank; and the European Bank for Reconstruction and
Development.
Bilateral development banks
Bilateral development banks are financial institutions set up by individual
countries to finance development projects in developing countries and emerging
markets. Examples include the Netherlands Development Finance Company FMO
and the German Development Bank DEG.
Other regional financial institutions
Several regional groupings of countries have established international financial
institutions to finance various projects or activities in areas of mutual interest. The
largest and most important of these is the European Investment Bank, an institution
established by the members of the European Union. Other examples include the
Black Sea Development Bank, the International Investment Bank (established by
the countries of the former Soviet Union and Eastern Europe), the Islamic
Development Bank and the Nordic Investment Bank.
List of IFI
AfDB African Development Bank (Tunis, Tunisia)
ADB Asian Development Bank (Manila, Philippines)
BIS Bank for International Settlements (Basel, Switzerland)
BSTDB Black Sea Trade and Development Bank (Thessaloniki, Greece)
CDB Caribbean Development Bank (St. Michael, Barbados)
CEB Council of Europe Development Bank (Paris, France)
European Bank for Reconstruction and Development (London, United
EBRD
Kingdom)
ECB European Central Bank (Frankfurt, Germany)
EIB European Investment Bank (Luxembourg, Luxembourg)
IADB Inter-American Development Bank (Washington DC, United States of America)
IFC International Finance Corporation (Washington DC, United States of America)
IMF International Monetary Fund (Washington DC, United States of America)
IsDB Islamic Development Bank (Jeddah, Saudi Arabia)
OECD Organisation for Economic Co-operation and Development (Paris, France)
WB World Bank (Washington DC, United States of America)
WTO World Trade Organisation (Geneva, Switzerland).
Objectives of IFI
IMF
1. Promote International Monetary Cooperation
2. Expansion and balanced growth of international trade
3. Promote exchange rate stability
4. Help establish multilateral system of payments and eliminate foreign
exchange restrictions
5. Make resources of the fund available to members
6. Shorten the duration and lessen the degree of disequilibrium in international
balance of payments
WB
1. To assist in process of reconstruction, development and restoration of
countries destroyed by war
2. To promote long term balanced growth all around the world
3. To encourage international investments for development of the member
countries
4. To encourage private foreign investments by means of guarantees
5. To help member countries in maintenances of equilibrium of BOP
IDA
1. To promote economic development
2. Increase productivity
3. Raise standard of living
4. To provide confessional (no interest or “soft”) loans to the world’s poorest
governments
IMF
1. Financing temporary balance of payments needs
2. Combating poverty in low-income countries
3. Mobilizing external financing
4. Strengthening the international monetary system
5. Increasing the global supply of international reserves
6. Building capacity through technical assistance and training
7. Dissemination of information and research
EBRD
1. To promote transition to market economies by investing mainly in the
private sector
2. To mobilize significant foreign direct investment
3. To support privatization, restructuring and better municipal services to
improve people’s lives
4. To encourage environmentally sound and sustainable development
EIB
1. Cohesion and Convergence
2. Support for small and medium-sized enterprises (SMEs)
3. Environmental Sustainability
4. Implementation of the Innovation 2010 Initiative (i2i)
5. Development of Trans-European Networks of transport and energy (TENs)
6. Sustainable, competitive and secure energy.
BSTDB
1. To promote regional cooperation among member countries
2. Economic development in member states principally by financing operations
in the private and public sectors
