World Bank

Examples of World Bank in the following topics:

• The International Monetary Structure

  • The main components in the international monetary structure are global institutions (such as the International Monetary Fund and Bank for International Settlements), national agencies and government departments (such as central banks and finance ministries), private institutions acting on the global scale (such as banks and hedge funds), and regional institutions (like the Eurozone or NAFTA).
  • The most prominent international institutions are the International Monetary Fund (IMF) , the World Bank, and the World Trade Organization (WTO).
  • The World Bank aims to provide funding, takes up credit risk, or offers favorable terms to developing countries for development projects that couldn't be obtained by the private sector.
  • Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the IMF and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group.
  • This map depicts the member states of the World Trade Organization (WTO).

• The United Nations

  • After World War II, most government leaders recognized that humankind could not afford a third world war.
  • Some of the most well-known agencies are the International Atomic Energy Agency, the World Bank, the World Health Organization (WHO), the World Food Programme (WFP), and the United Nation's Children's Fund (UNICEF).
  • The UN is a world leader in human rights protection and humanitarian assistance.
  • Lastly, the UN also focuses on social and economic development through the UN Development Program (UNDP) and other agencies like the WHO and the World Bank.
  • This new system opened world markets, promoted a liberal economy and was implemented through different institutions, such as the World Bank and the International Monetary Fund.

• Trade

  • During World War II, 44 countries signed the Bretton Woods Agreement.
  • The agreement set up rules and institutions to regulate the international political economy, resulting in the creation of organizations such as the the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements).
  • Currently, the Doha round of World Trade Organization negotiations aims to lower barriers to trade around the world, with a focus on making trade more favorable for so-called "developing" countries, though talks have faced a divide between "developed" countries and the major "developing" countries.
  • The World Trade Organization (WTO) is an organization that was formed in 1995 to supervise and liberalize international trade .
  • Common targets include the World Bank (WB), International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Trans Pacific Trade Agreement (TPPA), the Multilateral Agreement on Investment (MAI) and the General Agreement on Trade in Services (GATS).

• The Public Debt

  • Less creditworthy countries sometimes borrow directly from a supranational organization (the World Bank) or international financial institutions.
  • Most developed country governments are prohibited by law from printing money directly, that function having been relegated to their central banks.
  • However, central banks may buy government bonds in order to finance government spending, thereby monetizing the debt.
  • A typical example of this is provided by Weimar Germany of the 1920s which suffered from hyperinflation due to its government's inability to pay the national debt deriving from the costs of World War I.

• Federalism Today

  • While banks had long been incorporated and regulated by the states, the National Bank Acts of 1863 and 1864 saw Congress establish a network of national banks that had their reserve requirements set by officials in Washington.
  • During World War I, a system of federal banks devoted to aiding farmers was established, and a network of federal banks designed to promote home ownership came into existence in the last year of Herbert Hoover's administration.
  • Congress used its power over interstate commerce to regulate the rates of interstate (and eventually intrastate) railroads and even regulate their stock issues and labor relations, going so far as to enact a law regulating pay rates for railroad workers on the eve of World War I.
  • As early as 1913, there was talk of regulating stock exchanges, and the Capital Issues Committee formed to control access to credit during World War I recommended federal regulation of all stock issues and exchanges shortly before it ceased operating in 1921.

• The Goals of Economic Policy

  • Government and central banks are limited in the number of goals they can achieve in the short term.
  • For instance, the Federal Reserve Bank, European Central Bank, Bank of England and Reserve Bank of Australia all set interest rates without government interference, but do not adopt rules.
  • The above image Rate of change of Gross domestic product, world and OECD, since 1961, is one representation of economic growth.

• Economic Prosperity

  • Without substantial economic means, a state cannot expect to have influence on the world stage.
  • In 2008, a perfect storm of economic disasters hit the United States and indeed the entire world.
  • A series of the largest banks in the United States and Europe also collapsed; some went bankrupt, others were bailed out by the government.
  • Banks drastically tightened their lending policies, despite infusions of federal money.
  • The United States' share of world GDP (nominal) peaked in 1985 with 32.74% of global GDP (nominal).

• Politics and the Great Recession of 2008

  • The global recession affected the entire world economy, hitting some countries more than others.
  • The financial crisis was triggered by a complex interplay of government policies that encouraged home ownership, providing easier access to loans for subprime borrowers, overvaluation of bundled sub-prime mortgages based on the theory that housing prices would continue to escalate, questionable trading practices on behalf of both buyers and sellers, compensation structures that prioritize short-term deal flow over long-term value creation, and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making.
  • Senate's Levin–Coburn Report asserted that the crisis was the result of "high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street. " The 1999 repeal of the Glass–Steagall Act effectively removed the separation between investment banks and depository banks in the United States.

• The Great Depression and the New Deal

  • The Great Depression was a severe worldwide economic depression in the decade preceding World War II.
  • In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline.
  • Cities all around the world were hit hard, especially those dependent on heavy industry.
  • In many countries, the negative effects of the Great Depression lasted until the end of World War II.
  • The New Deal regulation of banking (Glass–Steagall Act) was suspended in the 1990s.

• The Golden Age: 1860–1932

  • By the beginning of the 20th century, per capita income and industrial production in the United States led the world, with per capita incomes double that of Germany or France, and 50% higher than Britain.
  • It was dominated by the new Republican Party (also known as the Grand Old Party or GOP), which claimed success in saving the Union, abolishing slavery and enfranchising the freedmen, while adopting many Whiggish modernization programs such as national banks, railroads, high tariffs, homesteads, social spending (such as on greater Civil War veteran pension funding), and aid to land grant colleges.
  • American history texts usually call it the Progressive Era, and it included World War I and the start of the Great Depression.
  • The period featured a transformation from the issues of the Third Party System, instead focusing on domestic issues such as regulation of railroads and large corporations ("trusts"), the money issue (gold versus silver), the protective tariff, the role of labor unions, child labor, the need for a new banking system, corruption in party politics, primary elections, direct election of senators, racial segregation, efficiency in government, women's suffrage, and control of immigration.
  • Foreign policy centered on the 1898 Spanish-American War, Imperialism, the Mexican Revolution, World War I, and the creation of the League of Nations.