What Are the Different Types of International Financial Institutions?
International financial institutions are collective names of financial institutions jointly established by many countries. Divided into regional and global international financial institutions. Before the Second World War, in order to deal with the German war reparations, the International Settlement Bank was established in Europe. This was the first international financial institution and a regional international financial institution. After the Second World War, an international monetary system centered on the US dollar was formed, and international financial institutions such as the International Monetary Fund and the World Bank were established. This is a global international financial institution. Similar international financial institutions have been established in other regions, such as the Inter-American Development Bank, the African Development Bank, and the Asian Development Bank. [1]
International financial institutions
- In order to meet the needs of international economic development, there have been various intergovernmental international financial institutions that carry out international financial business. Its origins date back to May 1930.
International Financial Institutions Bank for International Settlements
- The Bank for International Settlements is based on the Hague International Agreement signed in The Hague, The Netherlands on January 20, 1930. A syndicate of three major banks, Morgan Bank, Citibank New York and Citibank Chicago, was co-founded and located in Basel, Switzerland.
- The purpose of the Bank for International Settlements was to deal with the payment of German indemnities after World War I and to resolve international settlement issues for Germany. In 1944, according to the Bretton Woods resolution, the bank should be closed, but the United States retained it as a subsidiary of the International Monetary Fund and the World Bank. Since then, the bank's purpose has been changed to enhance cooperation between central banks of various countries, provide additional convenience for international financial services, and act as an agent or trustee for international clearing.
- The highest authority of the Bank for International Settlements is the Shareholders 'General Meeting, which is composed of representatives of central banks that subscribe to the bank's shares. The shareholders' meeting is held once a year. The board of directors leads the day-to-day business of the bank. The board of directors has a banking department, a monetary economy department, a secretariat and a legal department.
- The Bank's funding sources are mainly shares paid by Member States. In addition, it also borrows from Central Banks of Member States and absorbs deposits from customers in large quantities. Its main business activities are: handling international settlement business; handling various banking services such as deposit, loan and discount business; buying and selling gold, foreign exchange and bonds; handling gold deposits; and discussing important issues related to international currency and finance. As the activity center of the Group of Ten (representing the interests of developed countries) within the International Monetary Fund, the Bank for International Settlements frequently convenes members of the group and the president of the Swiss Central Bank to hold meetings. The meeting is held in Basel on the first weekend of every month.
European Investment Bank
- The European Investment Bank was a European financial institution formed on March 25, 1957, in accordance with the relevant provisions of the Treaty of the European Communities (the Treaty of Rome). Its members are all members of the European Community and are based in Luxembourg. The purpose of the European Investment Bank is to promote the balanced and stable development of the common market for the benefit of the European Community, using the funds of the international capital market and the community itself. The bank's main business activities are to provide loans and guarantees on a non-profit basis to finance development projects in underdeveloped areas, transform and modernize existing enterprises, and launch new activities. Its main source of funding is borrowing from European money markets.
Asian Development Bank
- The Asian Development Bank was established in March 1965 under the United Nations
- Asian Development Bank
African Development Bank
- The African Development Bank was formally established in September 1964 under the auspices of the United Nations Economic Commission for Africa. It opened its business in July 1966 and is located in Abidjan, the capital of Côte d'Ivoire. The purpose of the African Development Bank is to provide funding for the economic and social development of Member States, coordinate development plans of various countries, and promote African economic integration. Its funding sources are mainly the subscribed capital of Member States and borrowing from international financial markets.
Inter- American Development Bank
- The Inter-American Development Bank was formally established on December 30, 1959, and began operations on November 1, 1960, with its bank address in Washington, the capital of the United States. The purpose of the Inter-American Development Bank is to mobilize funds from within and outside the Americas to provide project loans and technical assistance for the economic and social development of Latin American countries in order to promote Latin American economic development. Its sources of funding are mainly subscriptions paid by Member States, borrowing from international financial markets and deposits from more developed Member States.