During World War II, the Bretton Woods Conference was held in 1944 having representatives from 44 nations to discuss the major international economic problems. The Bretton Woods Conference unanimously proposed for the setting of the three International Institutions. They are :-
1. IMF (International Monetary Fund)
2. IBRD(International Bank for Reconstruction and Development) or World Bank
3. ITO (International Trade Organisation)
IBRD and IMF both the institutions came into existence in 1946 and so they are called as “BRETTON WOOD TWINS”. For the establishment of ITO it took time and in place of it GATT (General Agreement on Tariffs and Trade) was formed.
It was established on 27th December 1945 and its head quarters is located at Washington, D.C. U.S. It functions to extend credit facilities for balance of payments.
• To promote exchange stability and to maintain orderly exchange arrangements in the world and avoid competitive exchange depreciation.
• To promote the world trade by removing the foreign exchange restrictions.
• To promote international monetary co-operations through this permanent institution, which has the machinery for consultation and collaboration on international monetary problems.
• To see that there shall be balanced growth of international trade, and the development of the resources of all members for the promotion and maintenance of high levels of employment.
• To give confidence to members by making the funds resources available to them in their balance of payments and thus to save national and international prosperity from destruction.
It has three organs. They are :-
1. Board of Governors
2. The Executive Directors
3. The Managing Director
Board of Governors :-
All members are automatically members of the Board. It consists one Governor and one alternate appointed by each member. The tenure of the members of the Board is five years. The vote have been allotted to the members according to the weightage of their contributions. USA enjoys highest weightage of 33% and then Britain 14%. The Board of Governors held meeting once in a year.
Executive Directors :-
There are 12 members in the executive body of the IMF. The decision can be taken only by 4/5th majority. The Executive Directors hold meetings twice or thrice a week.
Managing Director :-
Managing Director is the chief or head of the Organisation. He appoints the staff of the International Monetary Fund. He takes care of the IMF organisation