Do international Institutions make international financial c

Do international Institutions make international financial crises worse?

Solution

IFIs are institutions that provide financial support and professional advice for economic and social development activities in developing countries and promote international economic cooperation and stability.The term international financial institution typically refers to the International Monetary Fund (IMF) and the five multilateral development banks (MDBs): the World Bank Group, the African Development Bank, the Asian Development Bank, the Inter-American Development Bank, and the European Bank for Reconstruction and Development. The last four of these each focus on a single world region and hence are often called regional development banks. IMF and the World Bank, in contrast, are global in their scope; they are also specialized agencies in the UN system but are governed independently of it.

IFI’s take necessary measures to avoid financial instability around globe. During financial crises, only IFI’s can take controllable actions across globe. Thus IFI’s don’t worsen the financial crises, and instead help to revive the global economy during a crises, as was done during GFC in 2008.