Understanding the Distinctions between the IMF and the World Bank | CNBC Explains

by | Jun 17, 2023 | Bank Failures | 33 comments




The IMF and World Bank hold their Annual Meetings together each fall in Washington. But do you know the difference between the institutions? CNBC’s Elizabeth Schulze explains.

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The International Monetary Fund (IMF) and the World Bank are two prominent global financial institutions that play crucial roles in the global economy. Although they are often mentioned together, they serve different purposes and carry out distinct functions. In this article, we will explore the differences between these two institutions and explain their roles in the world economy.

The IMF, established in 1944, is an organization consisting of 190 member countries. Its primary goal is to promote global economic stability and growth. The IMF achieves this by providing financial assistance, policy advice, and technical assistance to member countries to overcome economic challenges, especially during times of crisis. It also acts as a forum for member countries to discuss and coordinate on global economic issues.

One of the key functions of the IMF is to provide financial support to member countries facing balance of payment difficulties. When a country experiences a shortage of foreign exchange reserves, making it unable to meet its international financial obligations, it can turn to the IMF for temporary loans. These loans, known as “bailouts,” come with certain conditions, such as implementing structural reforms and economic policies aimed at stabilizing and reforming the country’s economy.

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The IMF also monitors and evaluates the economic policies and performances of member countries through regular consultations and assessments. It provides policy advice and recommendations on macroeconomic stability, monetary policies, fiscal policies, and structural reforms to help countries achieve sustainable economic growth and stability. Additionally, the IMF conducts research and analysis on global economic trends and developments, serving as a source of knowledge and expertise for policymakers worldwide.

On the other hand, the World Bank, established in 1944, is an international financial institution focused on poverty reduction and sustainable development. It consists of two main components: the International Bank for Reconstruction and Development (IBRD), which lends to middle-income and creditworthy low-income countries, and the International Development Association (IDA), which provides interest-free loans and grants to the world’s poorest countries.

The World Bank provides financial and technical assistance to member countries for various development projects aimed at reducing poverty and improving living conditions. These projects can include infrastructure development, education, healthcare, agriculture, and environmental conservation. The World Bank works closely with governments to design and implement these projects, ensuring that they are sustainable, effective, and targeted towards the most vulnerable populations.

Unlike the IMF, the World Bank does not provide emergency loans or bailouts during financial crises. However, it does support countries in rebuilding their economies after crises or conflicts, promoting post-disaster reconstruction and recovery efforts. Furthermore, the World Bank acts as a knowledge hub, conducting research and analysis on development issues, sharing best practices, and providing policy advice to countries on sustainable development strategies.

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In summary, while both the IMF and the World Bank are essential institutions in the global financial landscape, they have distinct roles and functions. The IMF focuses on maintaining global economic stability, providing financial assistance, and offering policy advice to countries facing economic difficulties. On the other hand, the World Bank concentrates on poverty reduction, sustainable development, and providing financial and technical assistance for development projects. Together, these institutions contribute to fostering economic growth, reducing poverty, and promoting stability in the global economy.

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33 Comments

  1. King.

    The world Bank is a evil empire. They're not here to help any countries they work for the one percent They go around the world trying to tell countries what to do Nobody vote for them they re just a Bank for the RICH And they're NOT paying taxes either basically a rich group of people trying to boss the rest of the poor 99 percent on what to do. Know countries should listen to them. All countries should make their own money Then nobody can Control you and tell you what to do money is just worthless paper

  2. Alex S.

    soon they will run your life after the great reset. we need 100 million patriots with guns to stop this.

  3. tex

    IMF doesn't know it's arse from its elbow..

  4. المالية العامة و الضرائب والدراسات الأفريقية

    The importance of the agricultural sector The least developed African countries south of the Sahara will not progress except with the progress of the agricultural sector, increasing agricultural productivity, and self-sufficiency in strategic crops such as wheat, corn, rice, and barley. And all this is translated into increasing the contribution of the agricultural sector to the gross domestic product of each country, and therefore international economic aid must be directed to developing agriculture in these poor countries and not to areas that do not fatten or enrich from hunger, such as the areas of financial inclusion and digitization, money transfers through mobile phones The empowerment of women and other things that scatter international aid. International aid should not be focused on minor sub-things such as clean drinking water, renewable energy, education and health. All of this represents symptoms of the original disease, which is the lack of an agricultural surplus of strategic crops. International aid must be concentrated in the form of concentrated and accumulated investments in the agricultural sector in these poor countries, modernization of agricultural systems and irrigation systems, interest in improving the quality of agricultural soil, and the use of advanced machinery in agriculture, especially modern agricultural tractors. This is the only development path for the poor, least developed African countries. Thank you, may God's peace, mercy and blessings be upon you, economic researcher Hussein Mubarak, Cairo, on Shawwal 30, 1444 AH, May 20, 2023 AD.

  5. Chester G.

    The world bank and IMF are used to spread socialism. They give loans to developing countries for government projects, these projects go bankrupt, and the government has to take out more loans and print money to pay loans, causing massive inflation and more poverty. This is how developing countries stay poor.

  6. TrollToll4BoyZoul

    What about the genocides they’ve financed?

  7. Luke Smith

    That was such a 2nd grade level of what the IMF and World Bank actually do. It’s not here fault though, as if they would allow her to speak on the much more complex & terrible things the world bank and IMF do in order to keep NATO and it’s allies in power.

  8. Gold Shine

    IMF collapse now

  9. walkonearth

    5 years ago… CNBC… gimbal….steady cam… nah….

  10. Pankaj Kumar

    Don't take intrest against humanity of
    Women and resolve the graviance or conflicts of women empowerment
    And don't interfere our country social conflicts without our country people advices

  11. EJ Trujillo

    One is owned exclusively by Roths.

  12. SonyJimable

    Both are highly corrupting institutions of an old dying empire built on colonies and vassals controlled by debt and ruled by dominating multinational corporations.

  13. FILEMINO KILICHO

    Elizabeth you are so straight forward with this information. Thank you so much.

  14. Dr. Sudhir Bisht

    If IMF lends so much more than the World bank, why is that the World Bank has almost 4 times the employees of IMF?

  15. njuton i

    0:10 themeluesi i të dy institucioneve 0:35 fillimi 1:55 1971 shkëputja e dollarit nga ari

  16. Donald Harlan

    This story about the World Bank and IMF are lies.

  17. Valery De Saint Ambroise

    What’s the benefice for them, how do they gain the money that they give back ?

  18. Joe Travolta

    Joe jt postel member 1977reg
    No rek 0092086551
    Bank bpdkaltimtara
    Feedback go id

  19. razamataz firzam

    So that's how you finance a trillion dollar invasion.

  20. chico johnson

    if america helps ukraine its germans vs russians but if japan supports ukriane its not germany? old ancient japan does not reside in japan hence japan is supporting ukriane. in short japan is german.

  21. Joe Travolta

    Joe jt postel member 1977reg
    No rek 0092086551
    Bank bpdkaltimtara
    Feedback go id

  22. Uji An

    Give a Man a World , he will act as a False Messiah and will introduce modern day slavery with explicit tricks under his wrath.

  23. Hanji Anwar

    Isreal Russia chaina

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