1. International Monetary Fund

2. As originally conceived at Bretton Woods, the IMF was to be a supranational body essentially doing two things: it would regulate the rates at which currencies were exchanged among member countries; and it would help ensure international stability by making loans at times of crisis in member countries’ balances of payments.

3. Today IMF policies directly affect the economies of 185 countries and influence, sometimes drastically and often disastrously, the lives of the vast majority of the world’s people. Until recently the IMF was probably the single most powerful non-state (governance) institution in the world.

4. Structure of the IMF Established in 1945, when twenty-nine governments signed articles of agreement resulting from the 1944 Bretton Woods conference, the IMF actually began operations in 1947. The IMF was supposed to be the primary supranational institution that regulated the financial conditions deemed appropriate for the successful functioning of the world economy – especially, in its early days, conditions relating to currencies and exchange rates.

5. Theoretically the IMF is situated within the United Nations system. It is the central institution of the international monetary system, the system of international payments and exchange rates among national currencies, which prevents crises in the payments system. It does so by monitoring the economic policies of member countries and acting as a reserve fund that can be used by members needing temporary financing to address balance of payments problems. The IMF focuses mainly on the macroeconomic policies of governments, including: policies relating to the state budget, the management of money and credit, and the exchange rate; and the financial policies of governments, including the regulation and supervision of banks and other financial institutions.

6. The Board of Governors, with representatives appointed by all member countries (usually a country’s minister of finance or the governor of its central bank), is the highest authority governing the IMF. The Board of Governors meets twice a year at the joint annual meetings of the IMF and the World Bank to make decisions on major policy issues.

7. The Executive Board usually meets three times a week at the IMF headquarters in Washington, DC. The IMF’s five major shareholders – the USA, Japan, Germany, France and the UK – along with China, Russia and Saudi Arabia, have their own seats on the Board.

8. Until recently, the organization had some 2,800 employees recruited from 133 countries. These are international civil servants whose responsibility is to the IMF, and not to their national authorities. About two-thirds of the professional staff are economists. The IMF’s twentytwo departments and offices are headed by directors, who report to the managing director. Most staff work in Washington, although some eighty resident representatives are posted in member countries, where they advise governments (through the central banks and the ministries of finance) on economic policy. The IMF also has offices in Paris and Tokyo for liaison with other international and regional institutions and in New York and Geneva, mainly for liaison with other institutions in the UN system.

9. The IMF was formed mainly to address the economic needs of the European and North American nation-states in the immediate post-war period. These problems were thought to centre on exchange rates and balances of payments. To clarify: the term ‘exchange rate’ refers to the price of one currency in terms of others. In market systems, exchange rates vary with fluctuations in the demand for and supply of a country’s currency.