Global Monetary Fund
| File:Pardesi monetary fund logo.png Official logo for the GMF | |
| File:PMF Map.png Member-states of the GMF | |
| Abbreviation | GMF |
|---|---|
| Formation | 15 December 1945 |
| Type | International Financial Organization |
| Headquarters | Franklin, South Lake |
Region | Worldwide |
Membership | 7 countries (founding); 43 countries (to date) |
Official language | English |
Managing Director | Elizabeth Callis |
| Yosef Berman | |
Main organ | Board of Governors |
| Website | www.gmf.org |
The Global Monetary Fund (GMF) refers to an international organization whose prime goal is to assist nations in financial trouble. The GMF was established in the aftermath of the Western civil war in 1945 meant to survey and monitor financial developments. It furthermore lends funds to nations with payment difficulties and provides technical assistance to countries requesting it.
In recent years, in effort to strengthen the global financial system, to enhance its effectiveness into resolving crisis, the GMF has applied both surveillance and technical assistance work to the development of standards of good practice in its area of responsibility and to the strengthening of financial sectors. The GMF also plays an important role in the fight against money laundering and economic terrorism. Supporting all these activities are the GMFs economic and financial statistics. According to the GMF, "Guidance as well as world outlook are of significant importance to the financial markets."
Functions
The mandate of the GMF is outlined below:
- To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems;
- To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy;
- To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation;
- To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade;
- To give confidence to members by making the general resources of the GMF temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity;
- To shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.
History
The financial organization was founded by seven signatory members of the Lutzern-Carrington accords; Belfras, Western Confederal States, United Republic, Eagleland, Belhavia, Davisholm and Estovakiva during the Franklin Conference held in the House of Miguel on 15 December 1945. It was initiated by a Belhavian-Western economist and scholar Jacob Lutzern, who, as survivor of the Western Civil War, introduced a system of monetary management for commercial and financial relations among the world's major industrial states, as an early attempt of a fully negotiated monetary order intended to govern monetary relations among nations. This system was known as the Lutzern-Carrington agreement.
The articles of agreement describe a fixed exchange system that base the Western dollar as standard to backing every dollar overseas with gold. Other currencies were fixed to the Western dollar, and the Western dollar was pegged to gold.
A negative balance of payments, growing public debt, and monetary inflation by the Confederal Reserve caused the dollar to become increasingly overvalued in the early 1980s. Which culminated into the unilateral cancellation of the direct convertibility of the Western dollar to gold in May 1984 and with it the end of the Lutzern-Carrington system. Amid the Neoliberal Revolution it was replaced by a floating rate system, since then the principal functions of the GMF have changed.
Contemporary era
On December 8, 2001, following the fall of the DSRA the Global Monetary Fund (GMF) approved a $150 billion rescue package for Anikatia, the largest for any nation ever. The loan was the biggest in the GMF's history and it came with strict conditions, demanding government reform of the country's financial sector, reforms of the state-owned industrial giants, and economic liberalization. The Anikatian government, represented by President Kyon Chi-won implemented reforms in five areas: market liberalisation, and the financial, corporate, labour and public sectors. The swift actions of government to liberalise the economy by lifting barriers in the capital market and removing obstacles to foreign direct investment and foreign exchange transactions. The government also closed or suspended financial institutions that were uncompetitive. It provided fiscal support for restructuring to normalise financial flows, disposed of non-performing loans and recapitalise banks. Government-guaranteed public bonds were issued and the Anikatian Asset Management Corporation was mobilised to purchase non-performing loans. By August 30, 2005, Anikatia had fully repaid the last installment of a multi-billion dollar loan to the Global Monetary Fund with then President Yun Ho-jin saying "We've retaken our economic sovereignty, from now on, we no longer need prior consultations with the GMF in planning and executing our economic policies."