What’s the difference between the IMF and the World Bank? | CNBC Explains


If you’re confused by the
difference between the International Monetary Fund, the IMF, and
the World Bank. Well, you’re not the only one. Famed economist John Maynard Keynes,
who was a founding father of both institutions, said that he was confused
just by their names. The IMF and World Bank
are closely linked. So close that their headquarters are across
the street from each other here in Washington. So what’s the difference
between them? It all started at this hotel in
New Hampshire in July 1944, where 44 countries gathered for
the Bretton Woods Conference. The goal of the conference was to agree on a new
framework for the international monetary system, which is the rules and institutions that keep
the global economy running smoothly. After World War II, most people
agreed that the old system had failed. It had seen the Great Depression, unfair
trade policies and unstable currencies. After three weeks of heated negotiations at
Bretton Woods, especially between Keynes who was representing the United
Kingdom and Harry Dexter White, the U.S. Treasury representative,
a deal was reached. The agreement created the IMF and the International
Bank for Reconstruction and Development, soon to be known as the World Bank.
Each institution was given a distinct role. The IMF’s job was to oversee a system of
fixed exchange rates, which tied the value of a country’s currency to the U.S.
dollar, which was pegged to gold. The main purpose of this was to make sure exchange
rates stayed stable to encourage global trade. The IMF was also tasked with providing short-term
loans to countries struggling to pay their debts. Meanwhile, the main goal of the World Bank
was to give financial assistance to countries, mainly in Europe, that needed
to rebuild after the war. The roles of both the IMF and the World Bank have
changed a lot since the days of Bretton Woods. President Nixon unpegged the
U.S. dollar from gold in 1971, essentially dissolving the fixed exchange
rate system that the IMF oversaw. Since then the IMF has taken on a bigger role
fighting financial crises around the world. It keeps tabs on the global economy and puts
economic policies in place in member countries. The World Bank focuses its efforts on
development and reducing poverty. It provides funding and resources in projects
in some of the poorest countries in the world. Both institutions include 189 member countries
but the IMF has around 2,700 employees, compared to the World Bank’s
staff of 10,000. The IMF is funded mainly by quotas, basically
subscription fees, from member countries. It receives about $675 billion in quotas, with the U.S.,
Japan, China and Germany contributing the most. The World Bank is financed mostly
by issuing bonds to global investors. The group’s lending commitments reached
nearly $59 billion in fiscal year 2017. The IMF has committed $160 billion
under its current lending arrangements. Today the IMF’s biggest borrowers include
Greece, Ukraine, Portugal and Pakistan. The places where the World Bank is running
the most projects are in Africa and East Asia. One thing the IMF and World Bank have in common
is that they both have some opponents. Critics point to the conditions attached to their
loans, saying they don’t always address the specific economic
issues within a country. The IMF has come under fire for
continuing to bail out Greece even as the country has
failed to clean up its finances. Human rights groups have criticized the World Bank
for ignoring the environmental and social impacts of some of its projects in countries
like Ethiopia or Myanmar. But the IMF and World Bank say they promote global
economic stability, they make countries less vulnerable to crises, promote higher living standards
and provide vital help to countries that need it. Hey guys, it’s Elizabeth. Thanks so much for watching! You can check out more of our videos over here, including one about how hurricanes affect the economy. We’re also taking your suggestions for future CNBC Explains, so leave your ideas in the comments section. And while you’re at it, subscribe to our channel. Bye for now!

100 thoughts on “What’s the difference between the IMF and the World Bank? | CNBC Explains”

  1. In the late 20th and early 21st centuries the real meaning of the acronym or initials IMF is International Mother Fuckers

  2. How does imf give loan?
    Isarel palestine conflict?
    Indo Pak conflict?
    Why russia and usa have bad relations?
    Why china and russia have good relations?
    Why usq qnd china have bad relations?
    The fallout of USSR?
    The great depression?

  3. How does imf give loan?
    Isarel palestine conflict?
    Indo Pak conflict?
    Why russia and usa have bad relations?
    Why china and russia have good relations?
    Why usq qnd china have bad relations?
    The fallout of USSR?
    The great depression?

  4. How does imf give loan?
    Isarel palestine conflict?
    Indo Pak conflict?
    Why russia and usa have bad relations?
    Why china and russia have good relations?
    Why usq qnd china have bad relations?
    The fallout of USSR?
    The great depression?

  5. Actually, their goal is to swallow money not to help other countries! Pope John Paul II is correct when he said that the world only worship money your too blindFck

  6. I like how suggesting the background footage is. Talk about funding the poor nations? boom casually strolling along generic 3rd world wallpaper. Talk about functional differences? Show big monitors with flashing colors, we're so post modern we've got nothing to do with lending money on interest, possibly the only job older than … .

    Also, talking about the role of a bank and not its goal (or the means) is a massive bias when attempting to define it. World bank's goal is to … generate profit by investing in crippled economies. That won't fly. How about: The World Bank's role is to help emerging economies… ahh, there you have it. We "help" and in doing so generate profit. So, WB doesn't actually help, they service poor countries, they are its customers.

    To talk about the role of a tool without explaining what it's used *for*.

  7. IMF, WB, UN, WTO, NATO, SEATO are all founded by the US. As Obama so clearly stated, we made the rules and it favors the US.

  8. Well, the people in Asia or Pakistan have sunshine, water, food, shelter and oxygen. What else do they need? A loan from IMF or the World Bank!!

  9. You forgot that both in the 80s Helped cripple economies in Africa and South America because their Structural Adjustments programs had Xtreme and disastrous affects in those nations

  10. Sooo Gooood to see a news piece just explaining an important concept without getting into 'expert opinions' or moral lectures. Thanks 🙏🙇

  11. this was a whitewash of both systems of theivery.. one on a national level, the other dealing with DESTROYING an entire continent..
    yes, the IMF and the World Bank.. are theives and destroyers of life and lives..
    ….one fact alone proves it. look at the chart where these banks have invested in.. and look at their currentconditions and future outlooks!!! 3:15

  12. One time my teacher got so angry and called IMF an International mother f***er, and I agree with him.

  13. The IMF/World Bank is the real debt trap, USA uses the IMF/World Bank to control countries that borrowed from it. The world needs to ditch that dammed petrodollars!

  14. Guy checking out that sweet piece of hot ass at 0:20 lol. So good he did a double take lmao.

  15. What A load of Bs. World bank has done nothing for the developing countries rather than looting their valuable resources

  16. WOOOAAHH stop. Did you just say it gets to tell what economic polices other countries have to do? damn that is some mafia shit

  17. was created for we do not kill ourselfs never again.The problem of 21 century is we not became suicides;the resolve is not we kill each other or kill our own lifes. its not complicated what its not the same than easy.

  18. People who hate imf and wb so much need to remember that when a country is in crisis they need loans. without imf and wb, those countries would have to go to a foreign commercial bank (i.e bank of china, or smth) and exploit them cruelly. yes imf and wb also not that just, but they are run by representative of all nations so it has more sensibility than just a one-nation bank.

  19. They are both International Mother Fuckers and they need to be put in prisons and money redistributed back to the peoples and countries they put into misery .

  20. SAME ROBBERS
    97-98 Indonesia Thailand Philipines are example got robbed by IMF
    confessions of economic hitman – John Perkins
    a new world order – John Pilger

  21. IMF : International Mafia Financier.

    thanks to Petro dollar that make everything beyond reach in majority of the world.

  22. The IMF and World Bank promotes the continued expansion of the wealth gap between wealthy nations that gained their wealth through wars of conquest and exploitation with that of their former colonies.

  23. Another thing they have in common is they both screw over and enslave any country that borrows from either one of them. They rape the countries’ resources and destroy their social network infrastructure all in the name of “development”.

  24. If IMF's role is to monitor countries to avoid crisis, how can Venezuela and Zimbabwe hyper inflate its currency under it's watch?

  25. They r just working fr USA by giving money wid v much high interest they want countries to do wat is in USA intres..taking advantage

  26. Human right ???? World wars , slavery …colonizations done by western still happening and now they say human right violations ?

  27. The two are the biggest criminals we have ever seen. El Chapo is like Little Red Riding Hood when you compare him to these fraudsters.

  28. She forgot to say that’s their intended purpose….. in reality they only act for the interests of the greatest western powers.

  29. We are not living in a perfect world, dont take everystatment of an instition morally correct just because thats what is says in their motto or vision , mission

  30. There was video ad bout sharks prior this; come to think bout it, both institutions are just fancy loan-sharks on global massive scale!

  31. IMF AND WORLD BANK ARE JEWISH BUSINESS ENTITIES THAT ARE USED BY THE ELITES TO SIPHON WEALTH FROM POOR COUNTRIES

  32. Everything explained in the video wrong. Nothing true has been delivered. IMF is not helping poor countries but enslaving them. World bank is like United Nations. It says world are together but in reality US has the controller. Main devil organization is IMF. It can create money out of nothing. Banks do the same thing. Creating money from nothing. Don’t watch this video but read some books.

  33. This is to ensure that the world will be dominated by paper dollars. They lend it and will eventually be used to buy products and services that is controlled by the US.

  34. The job of these banks is to keep america and Europe in power and the rest of the world in debt and poor period.

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