The International Monetary Fund is an organization of 185 countries fostering global monetary cooperation and financial stability, international trade, promoting high employment and sustainable economic growth, and reduce poverty around the world.
With its near-global membership, the IMF is uniquely placed to help member governments take advantage of the opportunities - and manage the challenges - posed by globalization. The IMF tracks global economic trends and performance, alerts its member countries when it sees problems on the horizon, provides a forum for policy dialogue, and passes on know-how to governments on how to tackle economic difficulties.
Marked by massive movements of capital and abrupt shifts in comparative advantage, globalization affects countries’ policy choices in many areas, including labor, trade, and tax policies, helping countries benefit from global- ization while avoiding its downsides.
With cross-border financial flows increasing sharply, the interdependence of countries has deepened. The recent turbulence in advanced economy credit markets has demonstrated that domestic and international financial stability cannot be taken for granted, even in the world’s most wealthy countries.
The IMF has created a Short-Term Liquidity Facility to help emerging market countries, with a track record of sound policies, address fallout from the current financial crisis. It has also revamped its Exogenous Shocks Facility for disbursement of aid to countries hit by the fuel and food crises. Our World Economic Outlook provides finance ministers and central banks governors with a common framework for discussing the global economy. Our Global Financial Stability Report and our Financial Sector Assessment Program provide up-to-date analysis of developments in global financial markets, helping to identify potential financial stability risks.
The IMF and the World Bank jointly run the Financial Sector Assessment Program which a) alerts countries to vulnerabilities and risks in their financial sectors and, b) advises on how to strengthen oversight and supervision of banks and other financial institutions.
The work of the IMF can be summarized in three main types. Surveillance involves the monitoring of economic and financial developments, and the provision of policy advice, aimed especially at crisis-prevention. The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction. Finally, the IMF provides countries with technical assistance and training in its areas of expertise. IMF’s economic and research statistics supports these activities.
The IMF has applied both its surveillance and technical assistance work to the development of standards and codes of good practice in its areas of responsibility, and to strengthening financial sectors. It also plays an important role in the fight against money laundering and terrorism.