International financial institutions
Where does the World Bank get its money?
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- 15.3.7 Who runs the World Bank
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15.3.6 Where does the World Bank get its money?
The World Bank raises money for its development programmes by tapping the world’s capital markets and in the case of the IDA, through contributions from wealthier member governments. IBRD, FM-305 487 which accounts for about three-fourths of the Bank’s annual lending, raises almost all its money in financial markets. One of the world’s most prudent and conservatively managed financial institutions, the IBRD sells AAA-rated bonds and other debt securities to pension funds, insurance companies, corporations, other banks and individuals around the globe. IBRD charges interest from its borrowers at rates, which reflect its cost of borrowing. Loans must be repaid in 15 to 20 years; there is a three to five year grace period before repayment of principal begins. IDA helps to promote growth and reduce poverty in the same ways as does the IBRD but using interest free loans (which are known as IDA “credits”), technical assistance and policy advice. IDA credits account for about one-fourth of all Bank lendings. Borrowers pay a fee of less than 1 per cent of the loan to cover administrative costs. Repayment is required in 35 to 40 years with a 10 years grace period. Nearly 40 countries contribute to IDA’s funding, which is replenished every three years. IDA’s funding is managed in the same prudent, conservative and cautious way as is the IBRD’s. Like the IBRD, there has never been default on an IDA credit. 15.3.7 Who runs the World Bank? The World Bank is owned by more than 180 member countries whose views and interests are represented by a board of governors and a Washington based board of directors. Member countries are shareholders who carry ultimate decision making power in the World Bank. Each member nation appoints a governor and an alternate governor to carry out these responsibilities. The governors, who are FM-305 488 usually officials such as ministers of finance or planning, meet at the Bank’s annual meetings each fall. They decide on key Bank policy issues, admit or suspend country members, decide on changes in the authorised capital stock, determine the distribution of the IBRD’s net income and endorse financial statements and budgets. Yüklə 142,65 Kb. Dostları ilə paylaş:
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