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International Bank for Reconstruction and Development (IBRD)

The International Bank for Reconstruction and Development (IBRD) better known as World Bank was set up in 1944.

International Bank for Reconstruction and Development (IBRD)

 

The International Bank for Reconstruction and Development (IBRD) better known as World Bank was set up in 1944. Since IMF was designed to provide temporary assistance in correcting balance of payments difficulties, an institution was needed to assist long-term investment purposes. Thus IBRD was established for promoting long term investment loans on concessional terms.

 

Functions:

 

To assist in the reconstruction and development in the member countries by providing capital support.

 

To promote private foreign investment.

 

To promote growth of international trade in the long run and improve Balance of Payments of member countries.

 

To arrange for loans through for small and large projects.


Membership and Organization

 

All the members of the IMF are members of IBRD. It had 182 members in 2000. Like IMF, IBRD has a three-tier structure with a president, Executive Directors and Board of Governors. The Board of Governors is the supreme body. Every member country appoints one Governor and an alternate Governor for a period of 5 years. The voting power of each Governor is related to the financial contribution of its Government.

 

Capital Structure

 

It was started with an authorized capital of $10 billion . In July 1992, it has risen to $184.1 billion.

 

Funding strategy

 

The IBRD seeks to maintain unutilized access to funds in the markets in which it borrows. Its objective is to minimize the effective cost of those funds to its borrowers. It is to provide an appropriate degree of maturity transformation between its borrowing and lending. Maturity transformation refers to the Bank's capacity to lend at longer maturities than it borrows.


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