IMF and BIS play in prevention of monetary crises an Example of the Topic Economics Essays by

What roles do IMF and BIS play in prevention of monetary crises? Much has been said and written about how financial crises and monetary policies should be handled in different situations, but it will be interesting to have a closer look at how the International Monetary Fund and the Bank of International Settlements work for the prevention of monetary crises on the global level. Need essay sample on "What roles do IMF and BIS play in prevention of monetary crises?" topic? We will write a custom essay sample specifically for you Proceed IMF and crisis prevention The International Monetary Fund has always been criticized for its argumentative role in the prevention of the monetary crises and their resolution when they occur. However, this argumentativeness is only seen on the surface, and in reality the role of the IMF in prevention of crises should not be underestimated. It is important to see that the role of IMF in the support of the global financial system was changing with the changes in the world financial system. The requirements of time were always different and the IMF had to adjust to those requirements. 'Exacerbated by changing economic and political conditions, criticisms of the Fund stem overwhelmingly from differing views of its role in the world economy'. (Wood, 2006) In order to clearly define the role of the IMF in preventing monetary crises, it would be useful to start with the initial Articles of Agreement (Kahler, 1985) and on reading them we will find that actually the role of the IMF can be characterized as being two-fold: on the one hand, the IMF is to improve general monetary outcomes, by creating the important institutional framework for cooperation, especially in the sphere of multilateral payments system, (Wood, 2006), and on the other hand, the IMF is also meant for the promotion of international economic stability, as well as reducing and eliminating the imbalances of payments and other related disequilibria. However, these statements are rather theoretical, it should be admitted, and the IMF has often been accused of exchange rates manipulations and minute attention to the countries borrowers, the crisis of 80s has become one of the stages at which the role of the IMF was not only displayed, but was changed with the changing financial environment. During that period the IMF found out that its 'traditional short-term loans for balance-of-payments problems with 3- to 5-year repayment periods were not adequate for LDCs with protracted payment problems'. (Wood, 2006) Thus to deal with that debt crisis, the IMF decided to provide medium terms SALs, the repayment period for which was from 5.5 to 10 years. Though, of course, it is the example of how the IMF can deal with crises, and not prevent them, but these actions can also be looked at as the means of preventing further development of such crises and the appearance of new ones. BIS and monetary crises prevention Of course, crisis prevention is much better than crisis management and resolution. The aim of the BIS activity is clearly put through the phrase 'our aim must be crisis prevention where possible, and crisis resolution where necessary'. (Giovanoli, 1989) One of the advantages of the BIS is that it mostly concentrates on the activities, which prevent monetary crises both within the countries and at international level. The BIS sees the central element of its crisis prevention activity in the assistance for the development of countries' financial systems, their strengthening and robust performance. The activity aimed at prevention of monetary crises can be viewed through the number of international agreements, which have been proved to effectively operate within the matrix of the three world financial pillars - financial institutions, financial markets and financial infrastructure. In April 1997 the Basle Committee has released the Core Principles for Effective Banking Supervision, whic h was aimed at prevention of any serious monetary crises. (White, 1998) Those principles have been developed as a result of Asian crisis, and it is again, as the analogy with the IMF, not the prevention but resolution of the already existing crisis; though the actions undertaken after it, and the creation of those 25 Core Principles as a result of understanding that the crises are easier to prevent than to cure, show active performance of the BIS on its way towards elimination of monetary crises, though these principles are still not viewed as panacea and still need to be implemented internationally to become effective. Conclusion It is seen, that due to certain doubts, both the IMF and the BIS show clear striving for prevention and elimination of the monetary crises. Though the examples of such efficient activities are mostly seen not through prevention of such crises, but as a result of the already existing crises, but it should be borne in mind, that through the experience of those crises both organizations have learned valuable ideas which are reflected in the new standards and agreements, and which ultimately serve for the primary aim of both organizations - the prevention of monetary crises. References Giovanoli, M 1989, 'The role of the Bank for International Settlements in international monetary cooperation', The International Lawyer, vol. 23, no. 4 Kahler, M 1985, 'Politics and international debt: Explaining the crisis', International Organization, vol. 39, no. 3, pp. 357-360 White, W 1998, 'Promoting international financial stability: The role of the BIS', in: Teunissen, JJ (eds) Regulatory and Supervisory Challenges in a New Era of Global Finance, Hague: Fondad. Wood, N 2006, 'The globalizers in search of a future: Four reasons why the IMF and the World Bank must change, and four ways they can', Center for Global Development Brief.

Read our Advice on How to Make New Friends

Read our Advice on How to Make New Friends Useful Tips to Make New Friends Going to high school is both an exciting and stressful period in a life of every student. Making new friends is one of the difficulties every boy and girl experiences. However, it is worth remembering that everyone around you experiences the same feelings! Why is making friends so important? Firstly, it boosts emotional and social well-being. Education and school years are not only about studying. It is a time of experiencing something new and unforgettable and it is much better to do this with a reliable friend by your side. The importance of friendship cannot be underestimated. Real friends will support you in any situation not only in high school but also throughout all your life. The Following Techniques will Help You Make New Friends without Problems: Confidence Being confident is a good tip not only for making friends. However, this feature is very useful, if you want to start conversation with someone. Do not be afraid to make the first step, especially if you find a person interesting. Do not pretend Show people who you really are. Do not try to behave unnaturally to attract someones attention. Sooner or later, they will realize what kind of person you are and it may not end up well. As a result, the best way to make friends is to show whom they are dealing with at once. Show initiative Do not wait until someone will come to you with the offer to become friends. It may never happen. Start conversations first by introducing yourself. Be friendly and a good listener. Take part in after school activities Even if you have not found friends yet, do not be afraid to visit some activities after school alone. It is the best way to find friends who have the same interests as you. Show your attachment Do not be afraid to show that you care about your friends. Make something nice for them, which is, for example, a small gift. Be attentive to what they do. Do not forget to support them in case of troubles or congratulate them on their achievements. If you want to have good friends, be a good friend yourself Being a good friend is a real art. In friendship, you should learn not to place your ego in the center of the universe. Friendship is all about sharing, listening, compromising, and supporting each other. Develop these features to build a long-lasting and strong friendship. Conflicts and Friendship Ending It is sometimes very difficult to avoid conflicts. However, the most important is to know how to resolve them. Here are some steps you can take to solve the conflict: Listen to an opposite viewpoint; Ask questions to find out what your friend feels; Respect the position of your friend; Negotiate; Offer your solutions; Compromise. It is normal that sometimes friendship ends. Nevertheless, it is important to end it with dignity and leave only a positive impression. Meeting new people and making friends can make your life brighter.

Unintended Consequences by Edward Conard Essay Example | Topics and Well Written Essays - 1000 words

Unintended Consequences by Edward Conard - Essay Example "Unintended Consequences" by Edward Conard Some think it is random and based on America's entrepreneurial culture, but he argues it is based on the availability of risk financial capital. Is it one or the other or both? In my opinion, innovation in America is based on both America’s entrepreneurial culture and the availability of financial or risk of financial capital. Innovation is described as using knowledge to create changes in both the technical and organizational departments to create economic advantages for the said countries organizations incorporating it. It involves conducting new research into different field to create new products or enhance the quality of the already existing ones. America as country used the knowledge provided by innovation to obtain their desired productivity growth through such channels like developing new technologies, and absorbing and enhancing on both external and internal knowledge. America had the will, desire; spirit and vision which contributes to innovation making them explore different avenues of opportunities within the country. These were directed towards the economic, cultural and social sectors, and in the process they were able to develop resources and abilities that stimulated their growth into a first world country. Moreover, they used their ideas in transforming ideas, services and financial resources they use in sponsoring and conducting different projects across the country. The availability of financial or risk of financial capital significantly contributed towards the development of America’s entrepreneurial culture. Innovation as a process entails trials and mistakes that require financial risk and resources. Capital plays a significant role in the production of goods and services and without it; the process of production is incomplete. America as country was blessed with capital availability and accessibility thus its innovation process was simplified as they used the capital in purchasing for raw materials and resources that were needed to finish the different innovation processes they were conducting in different sectors within the country. The country was has also been successful because of the financial risk they have taken in their innovation sector. The sources of this finds were diverse like revenues and bank financing. This enabled America to acquire new ideas and enhance them into suitable good and services for their own use and benef it. Question 2 What is Conard's argument that the U.S. trade deficit is a good thing because it provides the U.S. with plenty of risk-adverse short-term financial capital? On the other hand, he thinks this is a problem because that money is difficult to use to support innovation and therefore financial institutions should be able to buy government insurance(rather than get it for free). Explain what he means by all of this. Trade deficit refers to a situation where a country imports more good than those which she exports. It significantly affects the country’s balance payment. According to Conard’s argument, the U.S trade deficit is a good thing because a rising trade deficit is associated to growth in the U.S economy. The deficit leads to a balance of trade in any economic situation. Deficit in trade allows for country to export more products to other neighboring countries and in the process creates new jobs for the unemployed and also creates a demand for a good or a product. Moreover, price competition is promoted by trade deficit and