IMF's Role in Global Financial Stability

The assignment delves into the International Monetary Fund (IMF)'s crucial role in ensuring global financial stability. It examines various functions of the IMF, including providing financial assistance to member countries facing economic difficulties and fostering sustainable global exchange rates. Specific aspects discussed include the IMF's lending programs, the impact of capital flows on economies, and the organization's efforts to address balance of payments issues and other multilateral payment challenges.

International Monetary Fund
(IMF) and how it addressed in
world financial crisis by
obeying International
Financial Law

ACKNOWLEDGEMENT
I would like to thank to my mentor who were keen to provide me the guidance for completing
the research. I would also wants to give the thanks to my colleagues and my friends who gave
their continues efforts for completing the research.

ABSTRACT
International Monetary Fund has given the financial assistance to the entire international
markets. It is observed that the international financial stability is mainly depends upon the
policies and norms of the IMF. The member states are keen to attain the financial norms for
stabilising the international financial economy. In the given research, it also seen that the IMF is
also work out to maintain the international exchange rates. The IMF also made some reforms in
order to attain the objectives.
From the given project research it has been concluded that how financial crises would be
overcome by the IMF. As the major things to be concern with respect providing financial
stability and economical growth opportunities by resolving problems of developing countries. So
that they can be able to sustain country. As the main objectives of IMF is to be fulfilled through
continuous review and analysing country potential to grow themselves with the use of financial
support. The effective utilization of polices and procedure that are set by IMF to be followed by
every country. The operations of IMF are to support financial help to other country those are
affected during crises.

Table of Contents
ACKNOWLEDGEMENT...............................................................................................................2
ABSTRACT ....................................................................................................................................3
Chapter 1. INTRODUCTION..........................................................................................................6
1.1Overview...........................................................................................................................6
1.2 Rational of study.............................................................................................................10
1.3 Research aims and objectives.........................................................................................11
1.4 Research Questions........................................................................................................14
1.5 Framework and analysis.................................................................................................14
1.6 Significance of research ................................................................................................15
1.7 Chapters structure...........................................................................................................15
CHAPTER : 2 LITERATURE REVIEW......................................................................................17
2.1 Effectiveness of IMF:.....................................................................................................17
2.2 Financial structure of IMF and relationship between IMF and international financial laws:
..............................................................................................................................................20
2.3 Ways through which IMF maximize financial stability around the globe:....................26
2.4 Literature Gap:................................................................................................................27
3. RESEARCH METHODOLOGY.............................................................................................28
3.1 Introduction....................................................................................................................28
3.2 Types of investigation:...................................................................................................28
3.3. Research Design:...........................................................................................................29
3.4 Research approach:.........................................................................................................29
3.5 Research philosophy:......................................................................................................31
3.6 Data collection method:..................................................................................................31
3.8 Data analysis:..................................................................................................................32
3.9 Accessibility Issues:.......................................................................................................32
3.10 Ethical issues in conducting research:..........................................................................33
3.11 Validity and reliability:.................................................................................................34
Chapter 4. Data Analysis...............................................................................................................36
Reliability of data:................................................................................................................38

Chapter 5. CONCLUSION AND RECOMONDATIONS............................................................48
Conclusion:...........................................................................................................................48
Recommendation:.................................................................................................................51
REFERENCES..............................................................................................................................52
.......................................................................................................................................................58

Chapter 1. INTRODUCTION
1.1Overview
International bodies are those which assists the member countries to overcome the
financial emergency and provide them financial stability. The IMF was incorporated in 1945,
and the treaty called the Articles of agreement which was signed by 29 members nations. In
1945, the first meeting was convened, and main aim of the meeting was to choose the executive
director, draft by laws and identify the permanent locations of it's headquarters, and after two
years, it started to operate its operations. However, the main aim is to provide technical and
financial aids, check exchange rates, and resolve financial issues internationally 1. At present,
there are 182 member nations, who got registered under this. In the modern world, under 1930,
world crisis was the major economic depression which was happen after 1st world war. It mainly
affects the developed countries from across the entire Europe and America. The effected nations
wanted to have the permanent global recognised institutions which could look out the entire
world economy by providing financial assistance during the time of depression. This mainly
impacts the world trade. That time Anglo-American decision enhancing demand for an
international institutions or bodies which could take care the of finances globally, and also
promote trade globally2. In 1944, there were 44 allied countries which met at Bretton woods
conference. The main issues were there to handle the post war international monetary system.
The main or primary debate was between the UK and US delegation and the nature of considered
organisation was highlighted. The UK delegation wanted a financial assistance which could aids
entire member nations economically, but this could exercise during economic emergency. While
1
Bodie Z. Investments. McGraw-Hill; (2013)
2 Ostry JD. managing capital flows: What Tools to use?. Asian Development Review.
2012 Jan 1;29(1):82.

on the other part, the US delegation wanted an organisation which could operate like financial
institution.
The Bretton Woods system framed a global foundation for exchanging one currency for
other. It additionally led to frame of the IMF and the World Bank. IMF was specially framed to
regulates exchange rates and lend reserve currencies to the countries which have trade deficits,
while on the other hand, World Bank was framed to give assistance in terms of capital to the
under developed nations. However, each international body's role changed over the time. The
nations who joined the discussions contributed a subscription fee, of shorts, to fund these
institutions; the amount of each contribution designated a nation's economic ability and dictated
its number of votes. In an efforts to free global trade and fund postwar reconstruction, the
member nations convinced to fix their exchange rates by tying their currencies to the US dollar.
American political leaders confirmed the whole world that its currency was so reliable by
connecting the US dollar to gold; $1 equalled 35 oz. Of bullion. Countries also agreed to buy and
sell US dollars to hold their currencies under 1% of the fixed rate. And thereafter,the golden age
of the US dollars started.
As far as it matters for him, most renowned British financial analyst John Maynard
Keynes, who drafted a great part of the plan, called it "the correct inverse of the gold standard,"
saying the planned fiscal framework would be whatever the controlling countries wished to make
of it. Keynes had even gone so far as to propose a solitary, worldwide money that wouldn't be
attached to either gold or governmental issues.
The Bretton Woods framework itself fallen in 1971, when President Richard Nixon
separated the connection between the dollar and gold — a choice made to keep running on Fort
Knox, which contained just 33% of the gold bullion important to cover the measure of dollars in
outside hands. By 1973, most real world economies had enabled their monetary forms to drift
openly against the dollar. It was a rough change, described by plunging stock costs, soaring oil
prices, bank disappointments and inflation.

The Bretton Woods Agreement was a most essential part in the global financial history.
The creation of the IMF and assessment of gold and foreign exchange rates are the most
important factor in today's world. This agreement also required to frame currencies convertible
for trade and other current account transactions.
Background of the study: During the financial emergency in 2007-09, there were so
many challenges faced by the governments3. International laws changes the financial rules and
regulations in order to have the financial stability. Henceforth, G-20 and the London summit had
focused on strengthening the financial regulations and controlling. Strengthening of rules and
regulations becomes the more controversial issue with the mandatory freedom of financial
markets. That is why, there is always need to have the equilibrium among these components.
The basis of study is associated with IMF that how they are supporting developing
countries with proper funding and financial assistance4. Training and supporting the workforce is
directly impact on the functioning of company that would help to create competitive advantages
for future growth to countries those are lacking behind financial crisis. There are various
agencies or bodies those are proves to be helpful in improving efficiency of corporation at the
international level. The objectives of IMF is to provide financial stability to manage flow of
currency at different levels of department and modify its operations. However , the methods of
financial assistances depend on the nature of production done by the particular or not able to
sustain for the longer duration. owing to this, it is important for authority of the organisation to
assess the financial need before implementing any strategies at global level. It aids to ensure that
optimum support should be provided for proper utilization of available resources and make
proper increase in rate of return 5. It is correct that by imparting various financial assistance to
the countries, company must bear cost that covered in longer duration. On the other hand, if
financial support is provided without any kind of evaluation that it would leads to serious
damage to performance of the country and might be strict actions can be taken against them. The
3 Milesi-Ferretti GM, Tille C. The great retrenchment: international capital flows during
the global financial crisis. Economic Policy. 2011 Apr 1;26(66):289-346
4 Chor D, Manova K. Off the cliff and back? Credit conditions and international trade
during the global financial crisis. Journal of international economics. 2012 May
31;87(1):117-33.
5 Reinhart CM, Rogoff KS. Banking crises: an equal opportunity menace. Journal of
Banking & Finance. 2013 Nov 30;37(11):4557-73.

procedure of IMF must be followed properly and according to mentioned criteria assistance
would be liable.
Background of the Organisation :At the time of Bretton woods conference, there were
so many agreements made to frame the GATT(General Agreement on Tariffs & Trade), World
Bank and the International Monetary Fund6. To become the member of the IMF, nations are
required to deposit a particular sum of money as a subscription amount. The member countries
are also required to comply with the IMF's terms and conditions. Gold reserves, loan repayments
form debtors and others are the mode of source of income of the IMF. The fund created by the
IMF is implemented for giving monetary assistance to member nations.
In the 60's decades, there were so many changes made in IMF's founding policies. A new
and advanced standard structural adjustment loans was incorporated. These loans assist the
borrowing member to stable the financial and economic structure7. These standard norms were
again changed. And then, the lending transaction for member nations have become the main
function of IMF. Additionally, most of the modifications have been framed to the draw policies
of the IMF. After the implementation of IMF, it offered financial aids to various nations having
monetary and economic issues. IMF is strongly working to make the changes in the entire
international scenario.
Strategies made by international laws to have the financial stability: The Financial
emergency brings the failure of the worldwide group to counteract to stop and manage, oversee
emergencies in the worldwide financial framework8. There were few issues. In the first place,
there was an absence of learning about the connections and the risk chances in the money related
framework. Second, control and emergency administration were taken care of at the national
level, notwithstanding the quick internationalization of the monetary markets. Third, surveillance
concentrated on person foundations and if these were steady independently it was regularly
reasoned that the framework as a entire was steady. An imperative purpose behind these
inadequacies was that there was a vague allocation of roles and no association with an explicit
command to manage, distinguish and dissect risk in the worldwide financial system.
6 Yellen JL. Macroprudential supervision and monetary policy in the post-crisis world.
Business Economics. 2011 Jan 1;46(1):3-12.
7 Borio CE, Disyatat P. Global imbalances and the financial crisis: Link or no link?.
8 Claessens S, Kose MM, Laeven ML, Valencia F. Financial crises: Causes,
consequences, and policy responses. International Monetary Fund; 2014 Feb 19.

There are so many functions of IMF such as: International Monetary Corporations,
firmness of exchange rates, to assist in balance of payments adjustment, assist with financial
crisis by giving international coordination and other ancillary objectives9.
 The IMF assist in having economic surveillance, as it generates reports on
members nations economies and advise the domain where any member have
weaknesses. The suggestion is to work on the emergency prevention with assist in
pointing out the areas of imbalances. IMF keep tracking the middle and low level
income member states and also provides financial assistance to them so that they
could recover their economies at the time of financial emergencies.
 IMF provides loans and financial assistance to member countries which have the
financial crisis. As it have about $300billion of fund which is directly usable for
loan purposes. And the amount of loan is gathered from the member countries
which deposits amount at the time of joining the IMF10.
 It also provides technical or economic training to the member countries that could
support many local economies and also ensure them to have the stability in their
economy.
1.2 Rational of study
The researcher is said to determine the purpose of research work in an appropriate
manner as they are evaluating according to the manner in which research is going to generate
value to concern body. The research must be in consideration with regard as valuable for other
aspects of financial existence. As a researcher it is important to evaluate the rational behind
conducting certain activity as research work about any of the areas of IMF11. The organisation in
current era are facing serious problems for inequalities with the other internal body. That they are
not able to support countries on time as monetary facilities to set up their business and make
valuable contribution to development of the world economy and individual growth. Hence, the
9 Haldane AG, May RM. Systemic risk in banking ecosystems. Nature. 2011 Jan
20;469(7330):351-5.
10 Howarth D, Quaglia L. Banking Union as Holy Grail: Rebuilding the Single Market in
Financial Services, Stabilizing Europe's Banks and ‘Completing’Economic and
Monetary Union. JCMS: Journal of Common Market Studies. 2013 Sep 1;51(S1):103-
23.
11 Stepanyan V, Guo K. Determinants of bank credit in emerging market economies.
International Monetary Fund; 2011 Mar 1

range of IMF is organised as to improve their operations at regulatory body. The agencies are not
able to identified the way in which they are to be supportive and make necessary adjustment for
the performance of countries. The unclear relation between IMF and its member are made huge
impact on creating more issues for organisation. The smooth running of operations are totally
depend upon the decisions made by the international bodies and its member countries12.
The testing of rationality of IMF which based on investing the rationality of forecasting
revision made by the international body over the past three decades. we have seen that more than
60% of real growth forecast series and 37% of GDP deflater are made consistent with rationally.
In the current scenario it is very difficult to identified various difficulties for business to
understand visibility of financial investment on developing countries13.
1.3 Research aims and objectives
The research is based on determination to the statement “ To provide financial stability
to overall world economy and protect them from financial crisis at the time of recession”.
This research Point out some of the ideas which are important to focus the goals which
are based on facilitating international trade, alleviating high rates of unemployment and help to
reduce the poverty in the economy. There are generally two thing comes in our mind when we
are determining the aim.
Q1. what we are going to accomplish ?
Q2. what are our desire outcome from the research ?
All these two things are to be considered while making any kind of decision regarding the
achievement of its aim to the country level. The main aim of the IMF is only focus on to provide
financial stability to the needy member countries14. These are all based on long term outcomes
that are identified from the research proposal. Each aim have some of different objectives that
are associated to the development of the organisation and the overall growth of other country.
12 Howarth D, Quaglia L. Banking Union as Holy Grail: Rebuilding the Single Market in
Financial Services, Stabilizing Europe's Banks and ‘Completing’Economic and
Monetary Union. JCMS: Journal of Common Market Studies. 2013 Sep 1;51(S1):103-
23.
13 Constancio V. Contagion and the European debt crisis. Financial Stability Review.
2012 Apr;16:109-21.
14 Blundell-Wignall A. Solving the financial and sovereign debt crisis in Europe. OECD
Journal: Financial Market Trends. 2012 Mar 23;2011(2):201-24.

The “Article of Agreements” of IMF provides basis of international monetary system. under this
the aim of IMF is to :
 Provide Financial assistance: To those poor countries, which are facing
difficulties economically due to civil wars, recession and other kinds of natural
calamities.
 Preventing Possible Financial crisis: The countries are trying to regulate the
borrowing funds that will use to stop the fraudulent individual from embezzling
the money. These reforms are curious to those countries which are having fixed
exchange rate policies from the crisis15.
 Carry out National, regional and Global lookout:The IMF looks after all the
member countries those are facing the problem of financial crisis to ensure its
own stability and growth. All the countries tries to establish polices that helps to
stable economic growth.
 Providing various financial and economic training: Apart from lending of
loans to its member countries IMF trains individual countries to avoid inflation ,
and maintain disequilibrium in the balance of payment and various financial
crises.
 To provide stability in the exchange rates : One of the main thing is that IMF
take into account to provide stability in the exchange rates to those who are
dealing in regular transaction into international trade mechanism16.
Evaluation of break up in the aims and objectives
The 2007 world crisis had made a huge impact on the international economy. At that time
the world bank and IMF both the organisations has supported the disturb countries that are
lacking from the financial support. They all are working with their aims and objectives to
provide full support to those who are concern to international financial laws that are related to
2007 financial crisis. One of the objective of IMF is to provide stability in the exchange rates:
15 Claessens S, Kose MM. Financial crises explanations, types, and implications.
International Monetary Fund; 2013 Jan 30.
16 Nelson RM, Belkin P, Mix DE. Greece's debt crisis: overview, policy responses and
implications. Journal of Current Issues in Finance, Business and Economics. 2011 Oct
1;4(4):371.

under this the IMF has played a vital role in stabilizing the exchange rates to facilitate
international payment by making adjustment in the international financial regulation acts17.
One of the criticism which find out in the objectives of IMF that are focused more at the
time of financial crisis in 2007.it arose just because IMF did not provide sufficient finance to
overcome financial problems that are accompanied with the recent trends. Basically IMF mainly
deals in the three major services :
 Surveillances
 Technical assistance,and
 Financial support
The objectives set by the company has not fulfilled and made negative impact on
member countries that are :
 They are asked to repay the loan in short duration of time with strict terms and condition.
 They put more burden on poor countries that they got panic in the name of economic
situation surveillances18.
 They face high problem of unemployment and increased in the public health and and
pension sectors of the developing countries.
These are those issues that are arises at the time of financial crisis which made huge
impact on the economic stability. The aims and objectives of the IMF and World bank has not
according to the set objectives. But after observing all these situation they have made various
changes to overcome these problems and made certain changes in their objectives. At act to work
as per the requirement to fulfilled the aim with providing better assistance to its member
countries.
1.4 Research Questions
For researcher they are responsible for preparing a define a proper list of research
questionnaires so that it provide guidance to complete the research work19. In current situations
17 Bricongne JC, Fontagné L, Gaulier G, Taglioni D, Vicard V. Firms and the global
crisis: French exports in the turmoil. Journal of international Economics. 2012 May
31;87(1):134-46.
18 Howarth D, Quaglia L. Banking Union as Holy Grail: Rebuilding the Single Market in
Financial Services, Stabilizing Europe's Banks and ‘Completing’Economic and
Monetary Union. JCMS: Journal of Common Market Studies. 2013 Sep 1;51(S1):103-
23
19 Constancio V. Contagion and the European debt crisis. Financial Stability Review.
2012 Apr;16:109-21.

researchers are giving more emphasizes on identifying answer to various lists of questions
mentioned below :
Q1. How efficient financial help is provided by IMF ?
Q2. What is the relationship between local bodies and international agencies ?
Q3. What are the ways in which Finance is to be provided to developing countries ?
Q4. How financial stability can be achieved ?
1.5 Framework and analysis
This is the imperative part of research which consists of detailed information related to
evaluate that will help to print valid outcome for the organisation. From the current study on
effectiveness of IMF program on increasing performance, exchange rate balance, development of
international trade by applying various tools and techniques20.
Research designed: The current study has been conducting by using application of
descriptive research which assists scholar to collect large amount of data and informations on
working management of IMF that how they are performing there roles and responsibilities.
Research philosophy: The present scenario is based on theoretical aspects as it mostly
deals with evaluation of effectiveness of training programmes on increasing financial stability
and maintaining balance of payment at international level21.
Research type: The research under research investigation is based on two type one is
qualitative which means to analysed the collected data. It will generate valid outcome from
collected information.
Research approaches: The current dissertation will based on deductive approaches as it
totally deals with funding and providing financial assistance to developing countries. Also to
help in trade at international level. It will help to collect relevant information in effective
manner.
Data collection: Under this there we have collected data from primary and secondary
data that has been collected in order to examine the aims and objectives. For the primary sources
20 Blundell-Wignall A. Solving the financial and sovereign debt crisis in Europe. OECD
Journal: Financial Market Trends. 2012 Mar 23;2011(2):201-24.
21 Claessens S, Kose MM. Financial crises explanations, types, and implications.
International Monetary Fund; 2013 Jan 30.

we have asked to fill questionnaire from the people about the working of IMF whereas secondary
sources taken as journals,books and other published materials22.
Data analysis: In the current project dissertation the data is collected by qualitative
techniques were scholar will make use of information in its analysis.
1.6 Significance of research
The present research made pure emphasis on funding system of IMF to its needed
countries to make them grow at domestic or international level. This study will prove to be more
effective for overall world development as it has support of more than 188 member23. With this ,
financial institution are able to adopt various steps regarding several programs to increase
awareness to support those countries who are in need of fund and because of this they are not
able to cop up with the current global era.
Apart from this dissertation it will helpful for organisations to make evaluation that what
are various impact that are arise at the time financial crisis in 2007. this will make effective for
other scholars to understand the simple types of study and on the basis of this they can able to
draw images for company .
1.7 Chapters structure
The research work is done in proper format. An appropriate structure has been followed
as provide brief overview of concern field of study. However, the sections determine aims and
objectives that are to be focused and make planning to achieved that on time24.
Chapter 1 : Introduction
The research work is going to begun with introduction that provide a brief overview
about the field of study. It also determine particular aims and objectives of the research.
Chapter 2: Literature Reviews
22 Nelson RM, Belkin P, Mix DE. Greece's debt crisis: overview, policy responses and
implications. Journal of Current Issues in Finance, Business and Economics. 2011 Oct
1;4(4):371.
23 Bricongne JC, Fontagné L, Gaulier G, Taglioni D, Vicard V. Firms and the global
crisis: French exports in the turmoil. Journal of international Economics. 2012 May
31;87(1):134-46.
24 Conyon M, Judge WQ, Useem M. Corporate governance and the 2008–09 financial
crisis. Corporate Governance: An International Review. 2011 Sep 1;19(5):399-404.

Under this section we provide core information related to effectiveness of IMF programs
that are being properly analysed by different researchers. It has inclusions of data from different
sources like books,journals,and other published materials.
Chapter 3: Research methodologyA40769
The next chapter is all about completion of literature reviews25. It consist of various
method and techniques are helps us to collect and analysed the data in order to generate valid
outcomes.
Chapter 4: Data analysis
This is the most important part in dissertation that under this collected data is being
analysed in the light of research questions and objectives. It provides details information related
to findings and appropriate suggestions.
Chapter 5: Conclusion and Recommendations
It is the end process of the research work that summarised form above data and
information . Along with that proper recommendation are also given that can justify the topic and
bring changes in the current workplace with the help of developing scope of processing
organisation responsibilities.
25 Said RM, Tumin MH. Performance and financial ratios of commercial banks in
Malaysia and China. International Review of Business Research Papers. 2011
Mar;7(2):157-69.

CHAPTER : 2 LITERATURE REVIEW
The researcher is required to have a depth review of data collected from various sources,
which mostly come from secondary sources. It is important to convene an analysis and various
information that are related to the secondary market. The previous literature review assists the
researcher to have the analysis from different sources and related aspects. This section of
research methodology deals with in-depth evaluation of relevant data collected from various
sources. These are through literature reviews that the researchers are able to get from different
channel as a complete overview that are related to the particular field of research study26. These
are related to from emphasizes on the effectiveness of employee training on maximising the sale
and creating opportunities that are related to research process and also for the development of the
growth of the research skill and knowledge that will help to provide valuable information about
the research project. The effectiveness of training requirement can be identified through
analysing the way of reviewing past literatures. This section creates a base for researchers by
providing them necessary information about aspect related to different prospectives.
According to”Bologna P”,There are various theories and model that are used by the
researchers which are related to the field of study. The historical data and technical informations
are to be considered as a part of the research activity. However the results generated from these
activities of the research process are totally based on the previous studies to evaluate through
from this head. A depth analysis of basic theories and literatures are mentioned in the part of
sections of research data27.
2.1 Effectiveness of IMF:
In the past time, IMF was the important part of providing financial assistance to the
countries that were facing the problems of financial crisis. The IMF administration were focused
on the overall support for preparing member countries to have self driven economy, so that they
could overcome the financial issues. It was seen that in the previous time, that IMF was facing
problems regarding providing financial assistance to the developing country as this is highly
26 Blanchard O, Romer D, Spence M, Stiglitz JE. In the wake of the crisis: Leading
economists reassess economic policy. MIT Press; 2012 Feb 24.
27 Bologna P. Is there a Role for Funding in Explaining Recent US Banks' Failures?.
International Monetary Fund; 2011 Jul 1.

influenced by America. In the year of 2007, there are two of the most dominant Bank which was
bankrupt and they were shut down that leads to great financial problems for the entire world.
As per the”Desai RM, Vreeland JR”, the financial stability of the country can be
managed and identified to overcome the shortage of funds to meet repayment of loans by the
people of America. However the country was trying various purposes and methods to overcome
these situations. Some of the method and tools are: To promote monetary co-operation at
international level by the financial institutions like IMF or world bank, who mainly works to
provides the equipments and machinery for consolidation and solve international financial
problems.
In the words of “Agnello L, Schuknecht L” IMF effectiveness and efficiency is to be
checked in order to facilitate the growth and expansion in the Balance under international trade
which ultimately contribute for promoting and maintenance and creation of huge level of
employment. It likewise develop productive growth among the member countries as its has to be
primary objectives of economic polices28. The other one is to help in promoting exchange rate
stability, to maintain orderly management of the financial transaction among its concern
members that are related to devaluation of competitive exchange rate that are followed in
developing countries.
In the opinion of “Desai RM, Vreeland JR”to establish multilateral system of payment
with respect of present transaction among its concern members and elimination of foreign
exchange restrictions that hamper the growth of world economy. The researchers have the idea
of how to manage the financial control and its impact they have planned the rule and regulation
that are set by IMF regarding assistances to those country who is lacking in terms of financial
growth and stability. As per“Agnello L, Schuknecht L”, to provide valuable confidence among
its member by making resources of money and credit on temporarily basis that are available to
them , thus IMF help them to make necessary adjustment in their balance of payment without
making more changes to national and international prosperity29. In respect of these statement or
purpose which are mentioned above are shorten the duration and measure the disequilibrium in
international payments of its regulatory body and staff authority.
28 Merler S, Pisani-Ferry J. Sudden stops in the euro area. Bruegel Policy Contribution;
2012.
29 Agnello L, Schuknecht L. Booms and busts in housing markets: determinants and
implications. Journal of Housing Economics. 2011 Sep 30;20(3):171-90.

According to “Merler S, Pisani-Ferry J”, when the IMF met for its time of year meeting
in Washington D.C back in 10 years ago the national economy was booming. The global era was
experience the wide period of sustained growth in the late 1960's and 1970's and the funds with
good durations were continues. There is big concern about the US market, but not any suggestion
was made available that a financial crisis in the sub-prime mortgage market were facing big
problem at the time recession since in 1930's. The reality was something different. That there are
no return to world economy as it was spread from 2007 from many years. It was cover with
recent trends:
Firstly , it was pictured as peak America. The year was suppose to lead up to 2007 that
has been mainly dominated by people at global level. According to Francis Fukuyama it was
called as 'End of the History'. The US remain as economic and military power, but because of
China that hauled the world out of recession in 2008-09. the period when US was unchallenged
is comes to and end.30
Secondly : In the year 2007 which is know for the peak growth of economy. It was
appeared that rapid expansion in 2000's was possible in that time because the financial system
was not under the control and households were taking huge amount of loan as debt from the
banks. In the word of ”Blanchard O, Milesi-Ferretti GM” the banks were lending money which
could only be paid in case if assets prices are kept raising. At that time the economies of more
than 65 countries includes wide number of large areas like, Argentina,china India, Nigeria,
Russian and Vietnam their rate are grown up to 7%.
On the other hand, there has no chance of return back in 2007 because that was suggested
another bust that was alarming at the corner. That should be the major concern, that china has
relied mostly on a credit binge which have a financed infrastructure that was without of any use .
The central banks and other financial authority are try to prevent second huge depression over
the past decade that was almost under the control of them.
Thirdly : The sub prime crisis marked as peak globalisation. From that moment there was
no any other real chance of multinational trade. Likewise opposing protection to rich and poor
countries by putting up barrier to trade between them.
30 Blanchard O, Milesi-Ferretti GM. (Why) should current account balances be reduced?.
IMF Economic Review. 2012 Apr 1;60(1):139-50.

The IMF efficiency is totally depends on the the operations and the international
regulatory bodies. Now, it has been seen that the international rules and regulations plays a very
crucial role in providing the financial stability across the member countries31.
2.2 Financial structure of IMF and relationship between IMF and international financial laws:
IMF is an international organisation that works for promote high employment, secure
financial stability, global monetary cooperation and facilitates international trade. Along with
this, international monetary fund is helpful in global growth and economic stability and
providing polices so as it can works with developing countries. The principle is that IMF is
responsible for private international capital markets that function imperfectly and many countries
have limited access to financial markets. There are mention below the benefits of international
monetary fund that are as follow:-
Help to develop international trade- IMF assist to improve the national and international trades
of the company. All countries wants to increase their export level by which it become in surplus
they having more power in financial term. Government prefer and motivate to do high number of
export of products and goods at international level32. On the other hand, government through
imposed some legal rules and regulation also special taxes those are have to follow while
importing any products through the other country.
Employability- Along with this, IMF also supports in order to increase employment in the world
that help to provide job opportunities to all persons. So they can earn something in their life and
full fill their requirements effectively. It is also help in economic growth of the country.
INTERNATIONAL FINANCIAL LAWS:-
Basis of comparison IMF World Bank
Meaning International monetary fund is
an organisation maintaining
global monetary system of the
globe.
World Bank is a global
organisation which is
established to make nations
economically developed by
providing finance and advice
31 Desai RM, Vreeland JR. Global Governance in a Multipolar World: The Case for
Regional Monetary Funds1. International Studies Review. 2011 Mar 1;13(1):109-21
32 INTERNATIONAL MONETARY FUND. 2017. [Online]. Available
through:<http://economictimes.indiatimes.com/topic/International-Monetary-Fund>.
[Accessed on 6th June 2017].

about financial management.
Focus on Stability of economy is key
focus of International mutual
fund.
Growth in economy and
development of countries is
what world bank is concerned
about.
Size It have a staff of 2300
members.
It have a staff of 7000
members.
Organisational structure Recognized as a single
organisation with which have
four credit lines. They are
FCL(Flexible credit line),
PLL(Precautionary credit line),
SBA(Stand by arrangement)
and EFF(Extended fund
facility.)
Sub institutions under this
organisation are named as
IBRD(International Bank for
Reconstruction and
Development) and
IDA(International
Development Association).
Membership Consists of 188 member
countries.
IBRD have 188 member
countries. IDA have 172
member countries.
Operations International monetary fund
provides assistance to the
member countries.
World bank facilitates lending
to member countries who
require.
Objectives All the issues related to
financial sector and
macroeconomics dealing is
main objective of IMF. It
promotes building and
maintaining economy of a
country.
Promotion of long term
development and aiming at
decreasing poverty in world
especially in members.
countries. Also works on
constructing and rebuilding
structure of a country to reduce
poverty.

Provides facilities to IMF provide borrowings to
government of member
country. For e.g. If the
currency id dropping of a
country it goes to IMF.
This provides facilities to poor
country's government who are
aiming to build project which
will help them to come out of
poverty.
The IMF's overall mission is to ensure the stability of international monetary system and
allocation of smooth flow operation to the developing countries.
As per ”International Monetary Fund”it does in three different ways which includes
keeping track record of global economy and economies of other countries ,leading of money
with balancing the payment of difficulties and providing practical support to its members. It is
mostly categories into two sources : (1) subscription or quota to the member nation, and provide
short-term and long-term borrowing to its member as a whole.
Accounting to Fritz Machlup, writing about the change of the international monetary
system in his book, he has touched on such issues which effects financially to the countries,
such as foreign reserves, their growth, compositions and distribution the international monetary
fund; difficulties along with balance of payments; inadequacy of international reserves and the
danger of the break the system33. Then, he has work on to extensively expand on various reform
measures such as extension of the gold exchange standard, centralization of monetary reserves
creation, freely exchange rates and how overcome the crisis when the global financial crisis
occur. In the conclusion, he also observes that an intelligent choice among these measures would
have to depend on many conditions and one cannot ascertain whether and to what extent they are
fulfilled. In economic policy decisions much depends on how they fit in which other measures
adopted and objectives accepted. In the opinion of monetary policy, credit and fiscal policy,
commercial policy, growth policy, counter-cyclic policy etc. are so closely related to one another
that it would not to be possible of all other areas of economic policy in the world.
Policies regarding the international monetary system must take account of the measures
and intentions of the government of a multitude of nations. The theories entertained by
influential monetary experts will, of course be important but what is really decisive in the
relevant considerations are notions, the beliefs , the courage and the powers of persuasion of
33 International Monetary Fund. 2017. [Online]. Available
through:<http://www.dictionary.com/browse/international-monetary-fund>. [Accessed on 6th
June 2017].

central banks, ministers of finance and other leaders of economic policy in the major nations.
Consequently, one cannot possibly expect that there will be one particular plan among all plans
for the international monetary system that may be singled out and proclaimed as the best under
set of all conditions34.
As per “Bodie Z. Investments”, the stop-gap solution initiated at the Vienna meeting IMF
and formalized in 'The General Arrangement to Borrow’ and the bilateral credit swap
arrangements between the US and several countries may tide us over the worst difficulties for
some time, possibly even for several years. To be sure, we would never expect a solution that is
really definitive, but perhaps we may hope for one that can dispel for a longer time the
apprehensions, nervousness and fears of collapse.
In the words of H. Robert Heller writing about international monetary system in his book
titled “International Monetary Economics” explains that most international commercial and
financial transactions are undertaken by individual economic country for the purpose of their
own gains and solve the financial problems in their country. It is seen that welfare maximization
of households and profit maximization by firms severe as the motivating force behind
international transaction. Gains from specialization and exchange may be identified.
Free international exchange of goods and services leads to more efficient resource
allocation in the production of commodities and increases the utility that can be derived from the
commodity bundle produced during the current period35. These international transactions are
recorded in the goods and services account of the balance of payments. The capital account of
the balance of payments records the transactions that involve the transfer of titles of ownership.
IMF came into being to promote economic and financial cooperation among the member
countries with a view to facilitate the expansion and balance growth of world trade.
IMF provide exchange stability, to maintain orderly exchange arrangements among
members and to avoid competitive exchange depreciation. According to “International Monetary
Fund”. It also provide short- assistance to correct the balance of payments disequilibrium. It
34 INTERNATIONAL MONETARY FUND. 2017. [Online]. Available
through:<http://www.standard.co.uk/topic/international-monetary-fund>. [Accessed on 6th June
2017].
35 International Monetary Fund. 2017. [Online]. Available
through:<http://www.telegraph.co.uk/international-monetary-fund/>. [Accessed on 6th June
2017].

performs various functions in order to achieve these objectives36. It provides loans to the
member countries in the form of sale of foreign currency.
Buffer stock facility, The extended fund facility, The supplementary financing facility
Compensatory and contingency financing facility are the loans which have been provided by the
IMF to their member countries.
On the other hand, Heller states that there remains the question whether it is possible to
devise an institutional framework that will minimize the cost associated with international
adjustments and thereby help to maximize the benefits to derived from international transactions.
Such as optimal international monetary system would consist of asset of institutions or rules that
would bring about speedy adjustment at minimum cost. IMF offers advices to the member
countries regarding the formulation and implementation of their economic policies. As per
“Ostry JD”,IMF provides loans to a member countries for economic structural adjustments that
helps the countries to produce export- oriented goods and render services that are demanded by
foreign countries.( IMF loan for reforms in Jamaica).
Flexible use of a variety of adjustment methods help the counties to reduce the burden of
adjustment to international monetary disturbances and therewith contribute to an improvement in
the welfare of the citizens of all the countries37.
In the opinion of Francis Cherunilam , explains that a country having a balance of
payments deficit has to settle it by transferring some generally acceptable means of international
payments to the creditors. About the IMF and the international liquidity, he writes that a major
function of the IMF is to provide international liquidity in accordance with the purpose specified
in the Article of Agreement. Part of the liquidity supplied takes the form of reserve assets that
can be used for balance of payments financing , while other takes the form of credit to members
that is generally to conditions.
Conditional liquidity is provided by the IMF under its various lending facilities. Most of
the IMF’s credit extended under these arrangements requires an adjustment programme for that
is intended to promote a sustainable external position. This catalytic role of the IMF has become
36 Bodie Z. Investments. McGraw-Hill; 2013.
37 Ostry JD. managing capital flows: What Tools to use?Asian Development Review.
2012 Jan 1;29(1):82

more important in the recent time when the private lending institutions have been less willing to
engage in international lending.
According to Unconditional liquidity is supplied through the allocations of SDR’s and
along in the form of reserves position in the fund which are the claims corresponding to the
resources that countries have made available to the fund. Member countries holding SDR’s and
reserve positions in the fund can use finance balance of payments deficits, without having to
enter into policy commitments with fund38.
The number of countries using fund resources has increased substantially over the years.
During this period, while the amount of outstanding fund credit has shown a considerable
cyclical variability, it has registered a substantial increase. In the words of “Blanchard O, Romer
D” the proportion of the outstanding fund credit subject to high conditionality has resulted
mainly from the need for more active adjustment policies of members using fund resources in
present circumstances and in the light of the continuing requirements for safeguarding the
revolving nature of the fund’s resources.
On the request of “Chor D, Manova K.” the poor countries, IMF provides training on
economic management, financial analysis and policy, fiscal policy, etc.. It also provided training
on balance of payments methodology, central banking services, organization and administration
of central banks39.
The fund makes its resources This paper identifies some of the current key reform
challenges for creating stable, yet efficient financial systems. It does so in light of lessons from
the recent and past financial crises and using insights from analytical and empirical studies. The
general objective of possible reforms is clear: to reduce the chance and costs of future systemic
financial crises in the most efficient manner, that is, at the lowest costs to economic growth and
welfare more generally. The most important conceptual and practical challenge identified in the
paper is that policy makers (and market participants) need to think more about the system as a
whole when engaging in their risk monitoring efforts and financial system reforms40. Although
some policy makers have adopted this mindset, many are still questioning its usefulness.
38 Milesi-Ferretti GM, Tille C. The great retrenchment: international capital flows during
the global financial crisis. Economic Policy. 2011 Apr 1;26(66):289-346.
39 Chor D, Manova K. Off the cliff and back? Credit conditions and international trade
during the global financial crisis. Journal of international economics. 2012 May
31;87(1):117-33.

However, the crisis has made clear that, in spite of what appeared to be individually sound and
well supervised financial institutions, well functioning financial markets, well diversified risks,
and robust institutional infrastructures, systemic risks emerged, yet went undetected or not
addressed for some time and then created great havoc.
Here, despite some decent progress in a few areas, the sad news is that the general approach to
reforms is largely still been based on an outmoded and by now largely repudiated conceptual
framework of regulations, which does not start from the “system-wide” characteristics of risks
and often misses key risks. Systemic risk in modern financial systems arises endogenously and
cannot just be captured by individual institutions’ balance sheets, or specific market or asset
price-based measures alone, especially when these metrics are static or backward looking. A
system approach is all the more necessary as modern financial intermediation processes add
newer elements that do not always fit into the traditional, silo based ways of formulating micro
prudential, bank- or market-based regulations and conducting institution-based or market-
specific supervision41. Reform approaches need to be more holistic – examining the interactions
between and across institutions, markets, participants, and jurisdictions, and across types of risks
(e.g., market, credit, liquidity, and operational). Moreover, approaches need to actively anticipate
the side effects of one regulation or action on others, both within and across jurisdictions. In
addition to lacking a focus on systemic risks, many reform areas have available to members,
under agreed conditions, to help them overcome balance of payments problems in an orderly
way, without undue disruption of the flow of international trade and payments. Several facilities
are available for extending credit to member for varying periods of 10 and subject to different
degrees of conditionality.
2.3 Ways through which IMF maximize financial stability around the globe:
There are many ways to international monitory fund maximize their financial stability
and statement. It is very important for the every country that provide many duty of the subjects.
Many country accepting financial developments and policies and also define the practices of the
company role and responsibility and take the best plan related to the financial growth a global
factor. This fund taking individual and region country and access domestic policies and balances
40 Blanchard O, Romer D, Spence M, Stiglitz JE. In the wake of the crisis: Leading
economists reassess economic policy. MIT Press; 2012 Feb 24.
41 Bologna P. Is there a Role for Funding in Explaining Recent US Banks' Failures?.
International Monetary Fund; 2011 Jul 1.

many stability of the payment. This process also create the financial statement including balances
sheet and profit and loss account for the business.
The alternative prospectors of the policies very effective on the global stability and take
policy support of the municipal country. International monetary fund employees and staff
discussing the financial and economic growth and development process. Labour, public and
private sector, environment and many union staff assesses the risk as well as uncertainty of those
factor and method. The balance of payment stability create the experiences on the member in
IMF. The structure of the consultation setting many article and agreement related to initiative
membership plan and ideas. The systematic assess of the country reducing crises and take
financial sector programs and events. Standers and codes define the initiative of the world bank
and other countries employees. This is define the good practices of the techniques and method
that evaluating company best process. It is regional view of the policies and practices that
developing financial statement in the IMF Board membership make many issues and problems
related to the international monitory fund. The size of the member number improving financial
sector and related to the country42.
It defines the responsibility of the international monitory fund and stabling the financial
system, institution, market and infrastructure facility and services. Increasing many research
related to the financial stability and taking best position of financial statement.
2.4 Literature Gap:
In depth research is carried out to have the sustainability for the purposes. The analysis of
previous literature are greatly important for getting the basic knowledge about how to have the
financial stability in the international markets. It also emphasis that the all the previous literature
gave the most valuable overview about the cited topic. Although the literature sometimes unable
to generate connection between IMF and its role in world financial crisis by obeying norms.
Although, it can be said that the literature gap occurred by identifying the shortcomings which
occurred by the previous literature43. Now, it analysed the specific aspects of research that
determines the ways in which the financial stability can be assured.
42 Said RM, Tumin MH. Performance and financial ratios of commercial banks in
Malaysia and China. International Review of Business Research Papers. 2011
Mar;7(2):157-69.

3. RESEARCH METHODOLOGY
3.1 Introduction
The research method help learner to do the search in an appropriate manner. Through the
correct methodology the total quality of the research is improved. As there are various different
options available with the researcher to it is important to decide which method is best suitable for
conducting the research. With the change in time different methodologies keeps on developing
which provide variety of options to the researchers therefore the person conducting the research
has wide range of options available with him to choose the best out of all. The selection of the
different methodologies depend so much on the available resources and the nature of research.
For conducting research for IMF, the suitable methods are given below in the following report.
Through the given options the researcher can understand each option that is available with him to
conduct the research. Through this section the decision regarding selection of methodology can
be done. This make it one of the most important section in the whole report as choosing the
correct method is of vital in nature for completing the research44. Different methodologies which
are applicable for conducting the research on IMF are given in detail below:
3.2 Types of investigation:
Before selecting the method for conducting the research it is important to first understand
the nature of the search. It can be conducted using options given below:
Qualitative research – It is broad methodological approach as it incudes various options under
it. It provide the researcher with quantitative data which helps the researcher in doing the
detail study of the given project. Results are presented in theoretical form and therefore
gives the learner full information that is relevant to the the research45. It is one of the most
popular form of research for conducting investigation of the given project.
Qualitative research – It is a form of investigating in which the researcher gets the results in
quantitative form. Its results are presented in graphs, charts, or other mathematical
expressions which are helpful in doing the comparisons more easily. It require complete
43 Conyon M, Judge WQ, Useem M. Corporate governance and the 2008–09 financial
crisis. Corporate Governance: An International Review. 2011 Sep 1;19(5):399-404
44 Gilpin R. Global political economy: Understanding the international economic order.
Princeton University Press; 2011 Aug 29.
45 Baylis J, Owens P, Smith S, editors. The globalization of world politics: An introduction
to international relations. Oxford University Press; 2017 Jan 16.

knowledge of the different mathematical tools so that the correct interpretations are done. It
is generally considered in the cases where comparative data is required by the researcher.
As in the given research, more of numerical information is required in quantitative
method and it is more preferable, and for theoretical information, there is need to conduct
qualitative research46. But under this method, it can not full fill the whole requirements. As in
the research the operations of IMF in different countries will also be observed therefore
qualitative research method will also be used by the researcher to give the user complete
knowledge of the topic.
3.3. Research Design:
It emphasis on how the research will be designed as the researcher has various options
like making a descriptive, exploratory or experimental research. Descriptive research gives the
total data that is available regarding the research topic and gives all the relevant facts of it. Than
is the exploratory which gives importance to develop new concept to the research topic and in
the end is the experimental research in which the results are presented through doing the
scientific and mathematical analysis47. These results can be tested later by the user as they are
measurable and also the data provided by this research design can be trusted more as it is based
on the experimental facts. The given research is conducted for understanding the various facts of
IMF and how it resolves financial crisis with obeying international financial laws. Now, it is
been seen that for all the above options of research designs will be used as variety of data has to
be collected in order to get the complete knowledge.
3.4 Research approach:
Perceptions made by the researcher during the preparation of the research can be termed
as approach to do the investigation48. There are different different types of research approaches
which can be inductive or deductive and the researcher use each depending upon the nature of
the search. In this research project, inductive approach is used in which existing factors are
observed. On this observation, certain pattern and designs are created that helps in providing
46 Sanford JE, Weiss MA. The Global Financial Crisis: Increasing IMF Resources and the
Role of Congress. Journal of Current Issues in Finance, Business and Economics. 2011
Jan 1;4(1/2):17.
47 Rich B. Mortgaging the earth: The World Bank, environmental impoverishment, and the
crisis of development. Island Press; 2013 Sep 30.
48 Bernstein S. Legitimacy in intergovernmental and non-state global governance. Review
of International Political Economy. 2011 Feb 7;18(1):17-51.

certain existing theory through tentative hypothesis. This study has qualitative nature which
focus on identifying effectiveness of training and development programmes. With the help of
inductive approach, current pattern of training and development can be analysed for IMF and
also evaluate the roles of it in an international platform in order to limit the international
financial crisis 49. Under this research, this has been seen that the management of the IMF is
striving hard to attain the international financial stability. The researcher has emphasised about
how financial stability can be achieved with the help of considering the world financial norms. In
this research, the researcher point out the issues about how IMF and other international bodies
can provide the financial assistance to the member nations and also able to overcome the finance
related issues in such member nations.
It can be said that this project is based on inductive approach. Apart from this in
deductive approach, new theory is generated and proved through creation of hypothesis.
Moreover, results are based on observation of existing facts and figures. The researcher is going
to make statement of outcomes that are valid and reliable in nature which will help in conducting
the research in an effective and efficient manner. Moreover, the outcomes are confirmed through
observation of existing facts and plans of IMF50. Inductive approaches on the other hands
emphases on observation of available facts and information provided by the countries and its
problem related to it accessibility. The current research is based on descriptive design since it
emphasis on details analysis of IMF operation and its functionality in their efficiency with
implementation proper plan and support to its member and development of the countries. its is
done through descriptive design that researchers is able to provide detailed analyse of various
aspects related to the filed of finance. On the basis of that observation point out by the IMF
regarding the growth and funding support to its needed countries so that they can make use of
that in his businesses also increase the productivity of their operations51.
49 Abiad A, Mishra P, Topalova P. How Does Trade Evolve in the Aftermath of Financial
Crises?. IMF Economic Review. 2014 Jun 1;62(2):213-47.
50 Beekarry N. International Anti-Money Laundering and Combating the Financing of
Terrorism Regulatory Strategy: A Critical Analysis of Compliance Determinants in
International Law. Nw. J. Int'l L. & Bus.. 2011;31:137.
51 Tularam GA, Subramanian B. Modeling of financial crises: a critical analysis of models
leading to the global financial crisis.

3.5 Research philosophy:
Research philosophy is a belief about the way in which data about phenomenon is
collected, stored, analysed and used. It is helpful in conducting the research work. It is very
important for researcher to select the best suitable philosophy so as to support the study into
consideration. This research project is based on two philosophy which is interpretive or
positivism philosophy. This report is based on interpretive philosophy in which researcher
integrates or studies about the human behaviour. This approach assume that access to reality is
only through social constructions like example, shared meaning and instruments etc. On the
other hand, positivism philosophy is suitable for the research work where scientific and
mathematical models are adopted for collection and analysis of information. But this study is
focused on qualitative evaluation of manner in which sales of the company can be improved
through training and development programme and in qualitative research, interpretivism
philosophy is used52. On the basis of this theory, researcher is able to conduct analysis in an
efficient and effective manner and without any disturbance. Therefore it can be said that this
philosophy is suitable in qualitative research. Under this research, the researcher used
interpretivism philosophy so that the he can make the research about the IMF and its role in
providing financial sustainability amongst the member nations effective and efficient and able to
draw a valid conclusions.
3.6 Data collection method:
In order to do the research data is the prime requirement as without it the research can not
be started. The researcher has the option to choose between both primary and secondary data.
Primary data is the one which is collected for the first time by the person conducting the
research. It require enough time to collect all the relevant data as it is collected directly without
any available assistance. Different sources for collecting the primary data are through interview
surveys experiments etc. It is a time consuming method and also comparatively more expensive.
Secondary method of collecting data is one in which the data is collected from the already
available information like from books journals internet etc. This method is used when there is
less time available to conduct the whole research and the results of the data are of nature which
52 Wouters J, Ramopoulos T. The G20 and global economic governance: lessons from
multi-level European governance?. Journal of International Economic Law. 2012 Sep
1;15(3):751-75.

do not change with the change in time53. It is not much expensive method as the information is
available very easily. In the give situation as immense data is require both the methods are used.
Apart from this both the methods are used because the latest data is of immense importance in
the given situation as IMF keeps on doing the different operations. It is through accumulation of
both primary and secondary data and informations that the researchers is able to conduct analysis
in an effective manner and generated valid and reliable results from their research process.
3.8 Data analysis:
Evaluation of the data is of immense importance. If the report is completed in correct
form but its interpretation is not done right than the whole project is of no use54. For analysing
the data, researcher can adopt qualitative and quantitative means and techniques that can be
adopted according to the situation or project that helps the researcher to outline valid and
reliable outcome. This research take qualitative nature in to consideration which in turn
indicates application of qualitative means. In present case the data collected will be analysed
through adoption of thematic analysis. The technique emphasizes on creation of themes so as to
segregate and analyse the data in an efficient manner55. The segregation of data collected into
different themes help in conducting analysis of vast range of information. Therefore it can be say
that analysis of relevant information through adoption of thematic analysis is going to generate
valid and reliable outcome. In this researcher has decided to adopt qualitative methods for the
objective of conducting research into consideration.
3.9 Accessibility Issues:
These issues focus on accessing relevant information and necessary resources that are
helpful in conducting the research in an efficient and effective manner56. If there is limited
availability of resources or information, then researcher has to face some problems or issues.
Moreover, if respondent will deny to provide information then it also create problems for the
53 Brassett J, Tsingou E. The politics of legitimate global governance. Review of
International Political Economy. 2011 Feb 7;18(1):1-6.
54 Bejesky R. Currency Cooperation and Sovereign Financial Obligations. Fla. J. Int'l L..
2012;24:91.
55 Bishop T, Reinke J, Adams T. Globalization: Trends and perspectives. Journal of
International Business Research. 2011 Jan 1;10(1):117.
56 Clegg L. Social spending targets in IMF concessional lending: US domestic politics and
the institutional foundations of rapid operational change. Review of International
Political Economy. 2014 May 4;21(3):735-63.

researcher. For removing this barriers, researcher should invest sufficient amount of money and
time so that he can do research without any interference. In present scenario, researcher has
ensured that there should be proper availability of adequate amount of resources and time for
achieving the desired result.
3.10 Ethical issues in conducting research:
In order to conduct research in an effective manner it is important to keep the ethics of
research in balance. These are the set of laws and rules which are in written or unwritten form.
The researcher has to make sure that safety of all the parties that are part of the particular
research is maintained57. All the relevant information which can effect the decisions of parties
involved in the search should be well communicated and with confidentiality maintained so that
no important message is leaked out. As research needs to have only the data which is associated
with the topic no personal information should be asked from the person who is answering as this
may effect his response. While conducting the search the objective should be maintained so that
the quality and continuity of the research is maintained. The researcher with the help of ethical
code of conduct, is able to make the report in a most effective manner which aids in meeting out
the research objectives efficiently. Ethical code of practice helps the researcher to do the research
work in a great extent.
The researcher has to make sure that the objective of research is well communicated to all
so that no one gets confused and do not deviate from the path. If the research objectives are not
clear than it may result into wrong interpretations which may lead to failure of all the efforts
taken while conducting the search. It is very important that sources to collect data are selected
very carefully as it directly effects the quality of the research prepared. Researcher has to take
care that all the sources that are used are authenticated as they are the base for research
preparation. It makes the ethics critical in nature58. It is very important that the investigator is
capable enough to know what is right for his research and what is not so that the final research is
acceptable by the user. More reasons why ethics maintenance is important while conducting the
research are it prevents the research from being false and free from fabrications. As the research
is a task which involve different individuals it is important that every person who is part of the
57 Gilpin R. Global political economy: Understanding the international economic order.
Princeton University Press; 2011 Aug 29.
58 Baylis J, Owens P, Smith S, editors. The globalization of world politics: An introduction
to international relations. Oxford University Press; 2017 Jan 16.

search are accountable to their results so that if the user wish to recheck the facts given in the
report by an individual he can ask the concern person. Also the members of research should be
participating in the research process with their own will. For this all the risk which is involved
with the research process should be disclosed to the members so that they do not question later
about their safety and health issues59.
Apart from this, it is also necessary that everyone should have trust on each other so that
the information can be shared among all with no fear. With trust respect for the members of
investigation is also an important issue as it is necessary for maintaining good relation between
the different individuals. When the research is completed the general public makes sure that no
harm is made to the natural resources, human rights, bio diversity etc. With this the researcher
also has to make sure that his research process is conducted in a manner in which safety of all
the individuals is maintained, no violation of law is done and the result will not give rise to any
kind of conflict for anyone. Not only the general public but there are different panels also who
makes sure that while conducting the research all the ethical practices are being utilised.
This process protect the researcher from legal actions that are taken by the law in case of
any unethical practice found during the process of research preparation. Therefore in order to
promote importance of ethics in research codes are generated which are adopted by the
associations and administrative unit as they get the outline through this about how to conduct a
particular research with the given resources and time period60.
3.11 Validity and reliability:
Validity means having meaning and soundness of something. For any data to be valid, it
is important that the provided information is effective and rational. Reliability, on the other hand,
is the quality of the information provided which can be trusted and used as a base for future
needs. This makes both an important factor to be maintained while conducting the research. As
the investigation is carried out with some motive or reason behind, the researcher has to make
sure that all the data provided in the search is valid and can be relied on. The researcher also
59 Sanford JE, Weiss MA. The Global Financial Crisis: Increasing IMF Resources and the
Role of Congress. Journal of Current Issues in Finance, Business and Economics. 2011
Jan 1;4(1/2):17.
60 Rich B. Mortgaging the earth: The World Bank, environmental impoverishment, and the
crisis of development. Island Press; 2013 Sep 30.

assure that all the data about the IMF and other international bodies are purely reliable and are
able to provide their operations in an effective manner.
The quality of the data in the report should be maintained so that the user can take
maximum advantage and use of it. The outcomes of any investigation depends widely upon the
sources through which the facts are taken and if those origins are not valid than the whole
research will go in vain and therefore will lead to loss of resources and time. The survey has to
be conducted in such a manner that it contains the reliable response by the respondents. For this
it is important that the questions that are asked by the researcher are valid and make sense to the
person giving the answers61.
Therefore the researcher should ensure that both internal and external reliability is
maintained so that even if different user use the data provided in the research makes same
interpretations to all. In case if mathematical data is also used in the report it is better if
certification validity is established as this will give the different user an idea about up to what
level the tools used for the calculations can generate the faithful answers. In the given report the
facts and souses are selected which are correct and capable of being relied upon therefore the
given report can be trusted by the user and can be used for future requirements.
61 Brassett J, Tsingou E. The politics of legitimate global governance. Review of
International Political Economy. 2011 Feb 7;18(1):1-6.

Chapter 4. Data Analysis
Data analysis is the most critical part of the research work. This is mainly done via in-
depth assessment of concerned information which the researcher is able to give the impressive
outcome. With the help of proper research techniques, the researcher is able to get the entire
objectives. The researcher has convened assessment of most useful information as per the data
analysis. In order to analyse the data the first thing which is important is that it should be
collected effectively. It is necessary that the sources from which the information was collected
were correct as if they are not relevant than analysis of the same will be of no use. Correct
interpretations are important so that the user can reach to the right conclusions. It can be done in
both qualitative and quantitative manner as the research includes both the matter. In order to
analyse the theoretical data the researcher needs to study the material in a way so that
conclusions can be made from the given data.
If the data is in an immense quantity, then it is necessary to give enough time to study so
that no quality information is missed out62. New approaches are developed to analyse the data
which support the researcher to draw the right conclusions. Another method is the quantitative
measure. It is also used by the the researcher in order to check the quality of mathematical
accuracy of different tools utilised in the research report. Surveys are being conducted for getting
the feedbacks from the public. As, it is important that the calculations are rechecked so that if
any mistake is done that can be corrected at the same time. If the corrections are not made before
putting the report into use, then it may lead to wrong interpretations which may also lead to loss
of quality. This makes data analysis an important process as it is essential to understand the
survey results.
It also provide the gaps which are present in the given data and thereafter those gaps can
be refilled in order to make the report correct63. If the analysis is correctly done it can offer
several benefits to the business like structuring the overall findings of the research conducted,
getting the small picture of the overall research project, receiving the correct meaning of the
62 Kim T, Koo B, Park M. Role of financial regulation and innovation in the financial
crisis. Journal of Financial stability. 2013 Dec 31;9(4):662-72.
63 Bauer MW, Becker S. The unexpected winner of the crisis: The European
Commission’s strengthened role in economic governance. Journal of European
Integration. 2014 Apr 16;36(3):213-29.

dataset. This will further help the researcher in taking the critical decisions from the data
provided in the research. Suitability of data with the research topic is very important. Therefore
during the analysis it has to be ensured that data provided in the investigation is appropriate64.
For this the investigation of the population on which the survey was conducted has to be done so
that it can be concluded that weather the target population was suitable to the research or not.
The sample size is also needed to be checked that weather it was adequate enough to reach at
the conclusions.
As different methods are used in the given research topic it is also important to
investigate that weather they are suitably incorporate into the investigation. For making the
analysis correctly different principles can be followed like the researcher should address the
following questions:
Objective – It is the initial requirement to analyse the research that what was the objective
behind conducting the research report. What all issues were needed to be consider while doing
the investigation and answer to what questions are needed so that it can be analysed that weather
the final research mater is covering all the above points65.
Justification- During the analysis it should be checked weather the given information can be
justified by cross checking it with resources from where it has been taken.
Data – Weather the data collected is relevant or not is also important to be checked so that if any
limitation is identified it can be resolved at the same time.
Methods used- It is very important to check the calculations and methods used to complete the
numericals as only is the appropriate technique is utilised it can satisfy the objective of research.
After this in the analysis of data presentation of the conclusion also plays an important
role. The results should be given in the order of their importance and relevance with given
headings and subheadings so that they can be analysed more effectively66. During the
investigation it should also be checked that weather the report is presented in the simple
64 Haas R, Lelyveld I. Multinational banks and the global financial crisis: Weathering the
perfect storm?. Journal of Money, Credit and Banking. 2014 Feb 1;46(s1):333-64.
65 Rey H. Dilemma not trilemma: the global financial cycle and monetary policy
independence. National Bureau of Economic Research; 2015 May 14.
66 Demirguc‐Kunt A, Detragiache E, Merrouche O. Bank capital: Lessons from the
financial crisis. Journal of Money, Credit and Banking. 2013 Sep 1;45(6):1147-64.

language so that it can be understood by the user else it will lead to the chances of wrong
interpretations or misleading results.
In the given report, the effects of international monitory fund is studied that how it
contributed during the crises. Surveys are conducted from the public so as to get their response
and reactions to the research topic. Thematic analysis is done to check the authenticity of the
different response gathered through the survey. Graphical representation also helped much in
analysing the whole data as it is easy to make the interpretations of graphs in comparison to the
text data. Therefore, this section of the research helps in doing the analysis of different aspects
and outcomes of the search report.
Reliability of data:
The data which has been gathered by doing secondary research, and it has been collected
for the general purpose not for the specific one. This source of information is easy to get and also
able to use for conducting research. It is used when there are large number of respondents
available and the researcher needs to draw the conclusions within the short time frame. Now this
has been seen that the primary source of information is not easy to gather and requires higher
cost for collection.
Under the provided scenario, it has been seen that the questions are based on the basis of
secondary source of information, and it emphasis that the questionnaire is framed in order to give
the useful information related to the topic. The graphical presentation is given in order to provide
the detailed investigation.
Theme 1. International exchange rates, balance of payments and other kinds of
multilateral payments are the main functions of the International Monetary Fund.
FINANCIAL ASSISTANCE
FUNCTIONS OF IMF
SUSTAINABLE GLOBAL EXCHANGE RATE
Balance of paymentsOther multilateral payments

From the above flow chart, it has been find that the functions of IMF are defined in details:
Sustainable International Exchange Rates: IMF main aim is to promote the economic stability
among the member countries in order to avoid the financial emergencies. However, there are
so many constraints which could arise if the economic instability happened. Instability could
enhance uncertainty, discourage investments, prevent economic growth, and spoil living
standards67. A dynamic market economy covers volatility and also structural changes. The
main challenge for the regulating authorities of IMF is to lowering the instability in their
own nations and overseas without limiting the economy's ability to enhance living standards
via enhancing productivity, employment and growth.
Financial assistance: IMF main objectives is to provide the financial assistance and grants to the
member countries. So that the member countries can make their economy at the position
where it can survive at the time of emergency. The IMF grants so many kinds of loans to the
member nations68. IMF also offer loans to the under developed government at a concessional
rate via using poverty reduction and growth facility. On the other hands, non concessional
loans are offered at market based interest rate via five mechanism: Stand-By Agreements;
Extended Fund Facility; Supplemental reserves facility; Contingent Credit facility.
Balance of payments: Inappropriate policies may form balance of payment in trouble in a
nation, in such a condition where enough funding on an affordable terms cannot be opted to
get international payment obligation. In the most terrible cases, such worst condition turn
into the financial crisis69. The nation's currency value might be forced to reduce so fast, that
affects the cost of the goods which leads to make them costly and domestic economy may
experience a painful interruption. These kind of problems might also spread to other nations.
Other multilateral payments: There are other multilateral payments functions which are
performed by the International Monetary Fund.
67 Karanikolos M, Mladovsky P, Cylus J, Thomson S, Basu S, Stuckler D, Mackenbach
JP, McKee M. Financial crisis, austerity, and health in Europe. The Lancet. 2013 Apr
19;381(9874):1323-31
68 Galati G, Moessner R. Macroprudential policy–a literature review. Journal of Economic
Surveys. 2013 Dec 1;27(5):846-78.
69 Bussière M, Delle Chiaie S, Peltonen TA. Exchange rate pass-through in the global
economy: the role of emerging market economies. IMF Economic Review. 2014 Apr
1;62(1):146-78.

Theme 2. International Monetary Fund key objectives is to promote international trade:
International monetary fund played a significant role in helpful in exchange rates by assist
international payment adjustments.
IMF role in promoting international trade:
IMF has been instrumental to the development of international trade. It acts as the
reservoir of the currencies of all the associate countries. A borrowing countries can borrow the
currencies of other country out of reservoir. It exchanges to the member countries for financing
the present transactions. It help to provide direction to monetary and financial matters. IMF is
responsible for promoting international trade by complete research studies and after then
published them. The trade related issues can be resolved through multilateral assistance provided
to member countries, thereby help in promoting international trade70.
Most of current account transactions does not have any kind of reserves prior to
international trade approval. The IMF, share the common goal of facilitating the balance
expansion of trade in goods and services. IMF provide financial support through its lending and
borrowing operations, analytical research as well as economic and trade balance. The
international trade is related with these analytical aspects of promoting it in international level71.
The IMF has jurisdiction over exchange measures related to international trade practices. It
covers Trade policies under its guidance and conditionality.
Although, it has not legally binding with trade restrictions. They all operated in respect of
economic consideration and its stability in the international and national level. The outcome in
the IMF pressing for trade and trade related reforms to continue speedy and deeply other then
related institutions72.
International trade promotion has been mentioned in Article 1 of the constitution of IMF.
IMF facilitate the growth and expansion of international trade, and contribute thereby to
promote and maintenance of high prospect of employment generation and actual income. It all
have to made through, productive resources and support of its members as primary objective of
70 Bourkhis K, Nabi MS. Islamic and conventional banks' soundness during the 2007–
2008 financial crisis. Review of Financial Economics. 2013 Apr 30;22(2):68-77.
71 Essers D. Developing country vulnerability in light of the global financial crisis: Shock
therapy?. Review of Development Finance. 2013 Jun 30;3(2):61-83.
72 Blanchard OJ, Dell'Ariccia MG, Mauro MP. Rethinking macro policy II: getting
granular. International Monetary Fund; 2013 Apr 15.

developing economic trade practise at global level. The IMF encourages its members to be open
and transparent about their international trade polices. The more member countries are informed
about profitable conditions in more countries, the better they can effort various opportunities in
international trade and investment.
A higher the trade, so does employment in both the exporting and importing countries.
International trade can also be promoted through exporting or importing goods and services in
the currencies in which they are being traded73. It will help to increase the revenues of the
country which will lead to regulate proper flow of funds to the developing countries. The balance
of payment of countries can also be maintained properly through promotion of international
trade. The IMF was established to provide proper stability and short term assistance for countries
facing financial difficulties in relation to trade balance.
From the above mentioned graph, it has been seen that the overall world trade was
distributed among four parts. European Union was the first major contributor of the entire world
trade in 2012. it contributes 30.9% total stake form the total part. Then, other TPP countries
ranked 2nd . But in case country, then the united states plays the main role for contributing in the
world trade. United States rank 2nd as it contributed 10.7%.
73 Galasso V. The role of political partisanship during economic crises. Public Choice.
2014 Jan 1;158(1-2):143-65.

Figure 2 shows the annual growth rate of the world trade during 2003-2012. United Nation was
the main nation which annual growth rate was highest and contributed 5.56%.
Under the trade agreement, it provide confidence to members by making appropriate
resources of the money could be available to them under adequate safeguard, thus providing
them opportunities to correct maladjustments in their balance of payment without resolving to
measures of destructive of national and international trade74. IMF provide customised and
comprehensive range of goods and services to help countries in promoting trade and organisation
development to their international trade programmes.
Theme 3. International Monetary Fund fulfil its objectives by reviewing the balance of
payments, acting as a forum of global negotiation and regulating international exchange
rates:
The main objective of international monetary fund is to provide the financial assistance to
all and in order to achieve this, there are various aspects such as balance of payments, regulation
74 Lysandrou P, Nesvetailova A. The role of shadow banking entities in the financial
crisis: a disaggregated view. Review of International Political Economy. 2015 Mar
4;22(2):257-79.

of international exchange rates and acting as forum for global negotiation which are required to
be reviewed. Balance of payment is the situation which can arise due to various reasons such as
high level of debts, persistent fiscal deficits, etc. and if all of them are not controlled than it will
lead to the situation of crisis75. So it is important for IMF to check that all the things are under
control and this can be done by proving help to the members in restoring the stability in terms of
economy which can be done by formulation of corrective policies and providing them with the
financial assistance. By doing so the stability will be established which is also its main objective.
It is needed that the exchange rates that are prevailing in the international market should be
reviewed by the IMF and this is because it is also one of the major objective.
With the change in the rates there is a great impact on the multilateral trading system so it will
be needed that these rates should be maintained by IMF. For this purpose various controls are
established by it which are needed to be checked from time to time in order to ensure that no
issues are arising in this respect. By this it will be ensured that all the objectives are achieved as
among them the main is to provide finance and ensure the stability in the world. As the exchange
75 Lütz S, Kranke M. The European rescue of the Washington Consensus? EU and IMF
lending to Central and Eastern European countries. Review of International Political
Economy. 2014 Mar 4;21(2):310-38.

rates will be fixed and there will not be fluctuations so there will be less chances of any problem
in the trading system76. But it is not possible that all the rates are fixed as there will be changes so
it will be needed that all the manipulations that are taking place should be reviewed and
controlled by it. There are many countries who will try to take the advantage of these
fluctuations so it is necessary that proper system should be there in order to ensure that there is
less amount of fluctuations as by this currency will be d evaluated which is not considered to be
good. IMF acts as the forum of global negotiation as it is the main aim of it to provide the
monetary cooperation in the world77.
It is required help all the countries in the money related issues. But in this there are
various issues that arise as it will be difficult to decide that to whom it should give the priority
and which will be the one to whom the help will be provided firstly. So it will be required that
proper cooperation should be maintained and decision should be made in such a manner that the
requirements of all are met and all are satisfied with the manner in which the the problems are
solved. All the above mentioned aspects will be reviewed by IMF so all the objectives that are
defined by it are achieved in the most appropriate manner possible.
Theme 4. IMF was inefficient for implementing its policies and legal norms, as it was not
able to bring states to achieve consensus in specific regulatory matters:
Financial help was provided to most of the developing countries so that they can develop
and flourish through different projects78. Grants were given which could be further spent on
goods bought from countries which donates and the practice fees are mostly included in it. Africa
receives these aids in various forms like assistance in project investments, support in budgets,
help with developed technologies and many more. Different grants are given with distinct repay
options like some as a loan which needs to be repaid at very minimal interest rate, some as a
complete free aid, like contributions etc. It is observed that in many cases IMF faced non
achievement due to failure of fiscal targets. Aid given in different ways like economic bail
76 Pianta M. Democracy lost: The financial crisis in Europe and the role of civil society.
Journal of Civil Society. 2013 Jun 1;9(2):148-61.
77 Cull R, Peria MS. Bank ownership and lending patterns during the 2008–2009 financial
crisis: evidence from Latin America and Eastern Europe. Journal of Banking & Finance.
2013 Dec 31;37(12):4861-78.
78 Fligstein N, Brundage JS, Schultz M. Why the Federal Reserve failed to see the
financial crisis of 2008: the role of “macroeconomics” as a sense making and cultural
frame.

resulted into deterioration of existing system as countries which adopted measure of IMF faced
difficulties in long run as harmful effects were observed in future after the polices were adopted.
Like in case of loans taking procedures for instance withdrawal from government in social group
aid delivery affected the legal authority as its development got affected and therefore its output
got reduced79.
Theme 5. The economists did less to escape the legal technicality due to which they have
been accused in the past for injuring the role of the IMF.
There are various legal technicality that could be considered by the economist, that has
been accused in the past time with respect to the IMF. It is mostly refers to a technical aspect of
law associated to the IMF. Some of the legal technicality are related with govern legal procedure,
enables or restrict access to court and limit the discretion of court in handling down judgement.
The relation with IMF and legal aspect includes dispute settlement that covers the fund, reflect
misunderstanding about legal nature of funds activities that are associated with the IMF. The
Economist have septate themselves from injuring the importance of IMF with helping in dispute
settlement that are related with the fulfilment of its objectives80. The reforms of international
fund's are based on financial system of its board mandate and essentially use to create
membership to protect the rights of IMF. It contribute more effectively on legal aspects in the
interaction with global financial institutions, that included under the IMF to maintain the
economic stability in the country.
Theme 6. In the economic matter of the world, interest of states and IMF are not same and
therefore they do not correspond to the calls of IMF.
The economic aspect of IMF deals with the micro and macro level of the country
development and growth. Macro stability is important for increasing and sustainable rate of
growth in affected countries that required funds at difficult circumstances.
Economic growth is the independent term that are influenced through poverty. Various studies
says are found to be a strong association between growth of IMF in more then 80 countries. A
countries have different financial trouble, overcome the problems of economic stability of the
79 Lane PR. Financial globalisation and the crisis. Open Economies Review. 2013 Jul
1;24(3):555-80.
80 Bruno V, Shin HS. Capital flows and the risk-taking channel of monetary policy.
Journal of Monetary Economics. 2015 Apr 30;71:119-32.

international financial system, that why IMF has create81. As the interest of the states are always
different with respect to role of IMF. As the state wants full support from IMF at the time of
financial crises. And, at the same time growth stability of the states are also be focused. The IMF
loan are meant to help the member countries whenever they required. The interest of states are
strongly supported by the international monetary fund. As it has been seen during the crisis 2007,
the IMF is in fact one of the best possible deals that could ever imagine: It's programmes provide
various advantages to our economy and our foreign polices. The co operation of states are zero-
repeat, zero- cost to the tax payer and economy82.
Theme 7. Nature of IMF's policy is of soft law and because of national sovereignty in the
currency matters:
Every country has exclusive right on their currency but at the same time they also
understand the importance of having a common currency because they assist in smooth financial
transaction between two countries. IMF exchange rate is based on demand of the currency of a
particular country. Countries who are members of IMF has to follow the exchange rate but
nations who are not members of IMF do not need to follow rate decided by IMF. Their is no hard
and fast rule to follow these rates because law in this field is not rigid but most of the nations
follow it because they also need proper mechanism for deciding exchange rate between different
countries. Members nations of IMF know the ways through which demand of their currency can
be increased which will also make a favourable change in exchange rate for them83.
Theme 8.Should a sovereign state inform about its Funds regarding its monetary policy
decision under Article IV of IMF's Article of Agreement:
It is very important that the members should be informed about how the total fund is being
utilised. It is of vital nature because in order to take various decisions like related to formulation
81 Magud NE, Reinhart CM, Vesperoni ER. Capital inflows, exchange rate flexibility and
credit booms. Review of Development Economics. 2014 Aug 1;18(3):415-30.
82 Steinkamp S, Westermann F. The role of creditor seniority in Europe's sovereign debt
crisis. Economic Policy. 2014 Jul 1;29(79):495-552.
83 Cull R, Peria MS. Bank ownership and lending patterns during the 2008–2009 financial
crisis: evidence from Latin America and Eastern Europe. Journal of Banking & Finance.
2013 Dec 31;37(12):4861-78.

of monitory policy. Once member has knowledge about available funds they can make policy
accordingly. In case of excess of availability relaxation method will be adopted in order to use
that fund in productive projects. On the other hand if the member were not told about what is the
status of current state funds than it is difficult to make future strategies and decisions related to
allocation of funds.
Theme 9. IMF is the Lender of last resort:
IMF is the lender of last resort. It has the capability to lend infinite amount of funds to sound
bodies. Hence, to convert the IMF into most efficient global lender of last resort. It covers two
components: frame adequate terms and financing.
In terms of design component, various factors of an enhanced international financial safety net
are at different stages of approval. They are:
 Various relaxation of the amounts available from and terms of access to the flexible
credit line for nations with sound economic and fiscal policies;
 Framing of precautionary credit line for nations with sound policies which do not answer
for the FCL and that will be accompanied by limited, and;
 An international stabilization mechanism via which IMF can use an enhanced tool kit.
Which enhanced tool kit can cover the unilateral offer by IMF for various qualifying
nations and other special facilities and easing of existing facilities.
The first two components is being approved by IMF management committee and a conservative
edition of third might be approved at the time of Seoul Summit. G-20 leaders are required to
endorse such kind of growth and call for future elaboration of international stabilization
mechanism.
Henceforth, IMF is the lender of last resort, which is the last option that are required to be opted
by the member nations at the time of financial emergency. The IMF also need to make their
operations in a most effective manner.
Although, this increased capabilities of IMF is enclosed in a wide policy framework
which will address consistently the moral risk issue facing entire lenders of last resort. When
focal banks lends to sound financial institutions, they merge mandatory limitless access to funds
with close direction and regulation of perspective recipient of those funds. The main aim is to fix
the potential for a financial institution to add extravagant risk to its portfolio and after that turn to
the central bank for liquidity aid at the time of insolvent or close that situation.

Chapter 5. CONCLUSION AND RECOMONDATIONS
The last chapter of the research work is mainly depends on making some valid and solid
conclusions. The person who conduct research can summarize the final results via analysis of
this chapter. With the help of this chapter, the researcher is able to make the valid and fruitful
results for the future. As, this chapter provides the entire overview about the whole research.
That is why this is considered to be one of the most important chapter of the entire research. This
chapter reflects the key conclusions of the assessment and explains the recommendations which
could enhance the effectiveness of the IMF in its crisis-concerned activities, and rendering a
financial safety net that members can tap to respond to a crisis.
Conclusion:
The IMF performed a key role in the international response to the financial crisis. The
challenge of the emergencies occurred when IMF resources were at a historic low concerned to
the world economy and the size of trade and financial flows, and against the backdrop of a key
downsizing practices. In hindsight, the IMF downsizing practise was turn out to be the mistake
and its timing unfortunate. This was initiated by reduced income due to scarce lending, and the
sight that the “great moderation” really meant that key financial emergency were unlikely and
the IMF would not required to perform the role of “international firefighter”. The financial crisis
move this view, and the IMF was found with the lesser number of staff experienced in
programme creativity and implementation. Members nations permits the IMF to shrink relative
to potential requirements because they thought that the IMF's resources were sufficient to
respond to the likely scope of future crisis. However, the prosperity therefore far in responding to
requests for financial assistance, the fact that resources were not in place at the time when the
financial emergency struck added uncertainty in a weak condition. Presently, there are about
30% of the resources reserve to the IMF in the form of quotas, compared with more than 80%
earlier to the financial crisis. The trust of member nations in the IMF and the viability of its
observation are personally associated to the IMF's authenticity. For instance, specialists in a few
EMEs and different nations recommended that IMF sees on overflows from eccentric fiscal
approach, and on the prudence of capital controls to bargain with the outcomes of these
overflows, did not give enough weight to their conditions. Essentially, experts in a few nations
trusted (however were not sure) that the IMF's remarkable loaning terms amid this emergency,

especially for European Union, would be accessible to different nations in future emergencies.
These concerns are exacerbated by the under-portrayal of EMEs in the administration of the
IMF. All things considered, share and administration change are basic to give more noteworthy
authenticity to the IMF, and to fortify its part in worldwide observation and emergency reaction.
The IMF taken part in, and composed, worldwide and local activities, incorporating with the G20
also, the FSB. These activities encouraged the reaction to different parts of the emergency and
improved the footing of IMF examination and exhortation. By and large, be that as it may these
organizations brought up issues about the IMF's part, accountabilities and freedom, and also
about how to guarantee uniform treatment of all part nations. The IMF's general record in post-
emergency reconnaissance was blended. Its calls for worldwide monetary boost in 2008–09 were
convenient and persuasive. In any case, by 2010 it had supported a move to union in a few of the
biggest propelled economies, combined with money related extension to animate request if
necessary to keep up the recuperation. The call for monetary combination ended up being
untimely, as the recuperation swung out to be humble in most exceptional economies and short-
lived in numerous European nations. The prescribed strategy blend was not fitting, as money
related development is generally incapable in boosting private request taking after a monetary
emergency. What's more, by 2012, a huge collection of investigation, including inside the IMF,
recommended that financial arrangement would have been a more compelling approach to fortify
request, and could have permitted a less expansionary fiscal arrangement. The arrangement blend
sought after by cutting edge economies had destabilizing overflow consequences for developing
markets, intensifying unpredictability in capital streams and trade rates. Likewise, the IMF did
not adequately tailor its recommendation to nations in view of their individual conditions and
access to financing while prescribing either development or combination. Proficient assessments
on the way of the money related emergency and on the best way to address it have not united,
and alert is required in drawing arrangement lessons from an phenomenal scene. There is a
developing acknowledgement that a more managed financial extension in expansive progressed
economies would have been gainful. On the other hand, open deliberations will probably proceed
on the relative danger of arrangements given the data accessible at the time. In any case, the IMF
indicated openness and adaptability in re-examining its financial arrangement guidance once the
development standpoint exacerbated, requiring a slower pace of union. At this crossroads, the
IMF should endeavour to remain a point of convergence of verbal confrontation and dialogue

and keep on energize a situation that remaining parts really open to elective points of view. The
IMF has gained ground in breaking storehouses and empowering interior verbal confrontation.
However challenges in incorporating essential messages from its leader reports and hazard
appraisals, and the finding that staff individuals still feel obliged in talking their brains, propose
that advance in these territories is as yet required.
that the key financial emergencies were to be made The research is about the role of of the
International Monetary Fund and how it address the fiscal emergency by obeying the
international norms throughout the world. The research is mainly based on determining
efficiency about the topic. Additionally, the researcher gave their efforts for identifying various
ways through which financial emergency can be managed through complying the international
financial norms. It also covered that the with the consistent efforts of International Monetary
Fund, the world financial emergency can be overcome, and this can only be achieved by opting
the international financial norms and policies among the member countries. The IMF is keen to
achieve the stability in the international exchange rate. So that the IMF could constant the world
economy. The validity for results derived is checked via determining level of experience. The
member countries are the main player which gives their feedbacks and reliable results to the
International Monetary Fund so that such institute is able to change its policies and norms in
order to attain its objectives. In the current situation, the member countries are expected to
provide the incredible feedbacks in context with the field of the research so that the policies can
be mould in order to attain the maximum outcome from the member nations.
A detailed assessment of the primary and secondary data will help the researcher to draw
a valuable conclusion so that the IMF could prepare an effective and efficient policy for doing
the member countries' economy on the track. With the help of gathered data, the IMF makes the
policies and also able to make changes in their policies as per the need of the member countries.
The main objective of this research is to identify the key aim and purpose of the research work in
an adequate manner. As the governing body's main aim is to evaluate as per the manner in
which research is conducting. There are so many tools and techniques which have been used in
this research report in order to analyse the rational behind convening the specific activities.
Under this research report, the qualitative and quantitative research tools has been taken
under this project report. But the research project is mostly depends on the qualitative research.
There are some tools used in the qualitative research, which are useful to draw a valid

conclusions over the research project. With the help of qualitative research, it has been found
that the IMF is able to consider the most dynamic way in order to reform the international
financial norms and regulation, so that the member nations can perform better in order to boost
their economy.
Recommendation:
This assessment found that the member nations and partners appreciated IMF
contributions for the international level to the crisis, and the IMF financial assistance aids
various members nations to eliminate its impacts of the crisis. This is also found that the aspects
of IMF activities can be enhanced to better warn the membership about the mounting risk and
danger and policies to reduce them, and to be ready to contribute to world safety net. There are
some recommendations which emphasis about the IMF's size and design of funding, about
handling partnerships and also wants to know about how to make macro and financial
surveillance more efficient and effective for member nations.
There are some loopholes which are required to be improved by the IMF in order to have
smooth functioning of its operational activities. IMF needs to make their operations effectively
so that financial stability can be attained. Now, under the given situation, stability can be
achieved by way of providing financial assistance so that the financial disturbing country can
overcome from the financial distress, this would also lead to make the IMF a strong body.
However, some other international bodies like world bank are required to support IMF for
attaining its objectives. The IMF also made a contingency plan so that the any shortcomings or
financial distress in any country could be eliminated. The IMF also make regulatory norms for
smooth functioning of operations.
IMF and world banks are striving hard to run their operations effectively so that the IMF aim
could be attained. The financial crisis is the major concern which are required to be followed by
the IMF.
The IMF needs to provides financial stability in a more effective manner so that global
stabilization could be attained. It also look out other objectives as well, like- IMF assist in
providing training to the member nations so that they could overcome the problems which are
related to financial distress or emergency.

Management need to work with the IMFC to guarantee that the IMF has enough funds to
face the future financial crisis resolution. Quotas are required to includes members' requirements
under likely crisis situations, with borrowing arrangements fixed to deal with the tail risk.

REFERENCES
Books and journal:
Bodie Z. Investments. McGraw-Hill; 2013.
Ostry JD. managing capital flows: What Tools to use?. Asian Development Review. 2012 Jan
1;29(1):82.
Milesi-Ferretti GM, Tille C. The great retrenchment: international capital flows during the global
financial crisis. Economic Policy. 2011 Apr 1;26(66):289-346.
Chor D, Manova K. Off the cliff and back? Credit conditions and international trade during the
global financial crisis. Journal of international economics. 2012 May 31;87(1):117-33.
Reinhart CM, Rogoff KS. Banking crises: an equal opportunity menace. Journal of Banking &
Finance. 2013 Nov 30;37(11):4557-73.
Yellen JL. Macroprudential supervision and monetary policy in the post-crisis world. Business
Economics. 2011 Jan 1;46(1):3-12.
Borio CE, Disyatat P. Global imbalances and the financial crisis: Link or no link?.
Claessens S, Kose MM, Laeven ML, Valencia F. Financial crises: Causes, consequences, and
policy responses. International Monetary Fund; 2014 Feb 19.
Haldane AG, May RM. Systemic risk in banking ecosystems. Nature. 2011 Jan
20;469(7330):351-5.
Stepanyan V, Guo K. Determinants of bank credit in emerging market economies. International
Monetary Fund; 2011 Mar 1.
Howarth D, Quaglia L. Banking Union as Holy Grail: Rebuilding the Single Market in Financial
Services, Stabilizing Europe's Banks and ‘Completing’Economic and Monetary Union.
JCMS: Journal of Common Market Studies. 2013 Sep 1;51(S1):103-23.
Constancio V. Contagion and the European debt crisis. Financial Stability Review. 2012
Apr;16:109-21.
Blundell-Wignall A. Solving the financial and sovereign debt crisis in Europe. OECD Journal:
Financial Market Trends. 2012 Mar 23;2011(2):201-24.
Claessens S, Kose MM. Financial crises explanations, types, and implications. International
Monetary Fund; 2013 Jan 30.
Nelson RM, Belkin P, Mix DE. Greece's debt crisis: overview, policy responses and
implications. Journal of Current Issues in Finance, Business and Economics. 2011 Oct
1;4(4):371.
Bricongne JC, Fontagné L, Gaulier G, Taglioni D, Vicard V. Firms and the global crisis: French
exports in the turmoil. Journal of international Economics. 2012 May 31;87(1):134-46.
Conyon M, Judge WQ, Useem M. Corporate governance and the 2008–09 financial crisis.
Corporate Governance: An International Review. 2011 Sep 1;19(5):399-404.
Said RM, Tumin MH. Performance and financial ratios of commercial banks in Malaysia and
China. International Review of Business Research Papers. 2011 Mar;7(2):157-69.
Blanchard O, Romer D, Spence M, Stiglitz JE. In the wake of the crisis: Leading economists
reassess economic policy. MIT Press; 2012 Feb 24.
Bologna P. Is there a Role for Funding in Explaining Recent US Banks' Failures?. International
Monetary Fund; 2011 Jul 1.

Merler S, Pisani-Ferry J. Sudden stops in the euro area. Bruegel Policy Contribution; 2012.
Agnello L, Schuknecht L. Booms and busts in housing markets: determinants and implications.
Journal of Housing Economics. 2011 Sep 30;20(3):171-90.
Blanchard O, Milesi-Ferretti GM. (Why) should current account balances be reduced?. IMF
Economic Review. 2012 Apr 1;60(1):139-50.
Desai RM, Vreeland JR. Global Governance in a Multipolar World: The Case for Regional
Monetary Funds1. International Studies Review. 2011 Mar 1;13(1):109-21.
Gilpin R. Global political economy: Understanding the international economic order. Princeton
University Press; 2011 Aug 29.
Baylis J, Owens P, Smith S, editors. The globalization of world politics: An introduction to
international relations. Oxford University Press; 2017 Jan 16.
Sanford JE, Weiss MA. The Global Financial Crisis: Increasing IMF Resources and the Role of
Congress. Journal of Current Issues in Finance, Business and Economics. 2011 Jan
1;4(1/2):17.
Rich B. Mortgaging the earth: The World Bank, environmental impoverishment, and the crisis of
development. Island Press; 2013 Sep 30.
Bernstein S. Legitimacy in intergovernmental and non-state global governance. Review of
International Political Economy. 2011 Feb 7;18(1):17-51.
Abiad A, Mishra P, Topalova P. How Does Trade Evolve in the Aftermath of Financial Crises?.
IMF Economic Review. 2014 Jun 1;62(2):213-47.
Beekarry N. International Anti-Money Laundering and Combating the Financing of Terrorism
Regulatory Strategy: A Critical Analysis of Compliance Determinants in International
Law. Nw. J. Int'l L. & Bus.. 2011;31:137.
Tularam GA, Subramanian B. Modeling of financial crises: a critical analysis of models leading
to the global financial crisis.
Wouters J, Ramopoulos T. The G20 and global economic governance: lessons from multi-level
European governance?. Journal of International Economic Law. 2012 Sep 1;15(3):751-
75.
Brassett J, Tsingou E. The politics of legitimate global governance. Review of International
Political Economy. 2011 Feb 7;18(1):1-6.
Bejesky R. Currency Cooperation and Sovereign Financial Obligations. Fla. J. Int'l L..
2012;24:91.
Bishop T, Reinke J, Adams T. Globalization: Trends and perspectives. Journal of International
Business Research. 2011 Jan 1;10(1):117.
Clegg L. Social spending targets in IMF concessional lending: US domestic politics and the
institutional foundations of rapid operational change. Review of International Political
Economy. 2014 May 4;21(3):735-63.
Kim T, Koo B, Park M. Role of financial regulation and innovation in the financial crisis.
Journal of Financial stability. 2013 Dec 31;9(4):662-72.
Bauer MW, Becker S. The unexpected winner of the crisis: The European Commission’s
strengthened role in economic governance. Journal of European Integration. 2014 Apr
16;36(3):213-29.
Haas R, Lelyveld I. Multinational banks and the global financial crisis: Weathering the perfect
storm?. Journal of Money, Credit and Banking. 2014 Feb 1;46(s1):333-64.
Rey H. Dilemma not trilemma: the global financial cycle and monetary policy independence.
National Bureau of Economic Research; 2015 May 14.

Demirguc‐Kunt A, Detragiache E, Merrouche O. Bank capital: Lessons from the financial crisis.
Journal of Money, Credit and Banking. 2013 Sep 1;45(6):1147-64.
Karanikolos M, Mladovsky P, Cylus J, Thomson S, Basu S, Stuckler D, Mackenbach JP, McKee
M. Financial crisis, austerity, and health in Europe. The Lancet. 2013 Apr
19;381(9874):1323-31.
Galati G, Moessner R. Macroprudential policy–a literature review. Journal of Economic Surveys.
2013 Dec 1;27(5):846-78.
Bussière M, Delle Chiaie S, Peltonen TA. Exchange rate pass-through in the global economy:
the role of emerging market economies. IMF Economic Review. 2014 Apr 1;62(1):146-
78.
Bourkhis K, Nabi MS. Islamic and conventional banks' soundness during the 2007–2008
financial crisis. Review of Financial Economics. 2013 Apr 30;22(2):68-77.
Essers D. Developing country vulnerability in light of the global financial crisis: Shock therapy?.
Review of Development Finance. 2013 Jun 30;3(2):61-83.
Blanchard OJ, Dell'Ariccia MG, Mauro MP. Rethinking macro policy II: getting granular.
International Monetary Fund; 2013 Apr 15.
Galasso V. The role of political partisanship during economic crises. Public Choice. 2014 Jan
1;158(1-2):143-65.
Lysandrou P, Nesvetailova A. The role of shadow banking entities in the financial crisis: a
disaggregated view. Review of International Political Economy. 2015 Mar 4;22(2):257-
79.
Lütz S, Kranke M. The European rescue of the Washington Consensus? EU and IMF lending to
Central and Eastern European countries. Review of International Political Economy.
2014 Mar 4;21(2):310-38.
Pianta M. Democracy lost: The financial crisis in Europe and the role of civil society. Journal of
Civil Society. 2013 Jun 1;9(2):148-61.
Cull R, Peria MS. Bank ownership and lending patterns during the 2008–2009 financial crisis:
evidence from Latin America and Eastern Europe. Journal of Banking & Finance. 2013
Dec 31;37(12):4861-78.
Fligstein N, Brundage JS, Schultz M. Why the Federal Reserve failed to see the financial crisis
of 2008: the role of “macroeconomics” as a sense making and cultural frame.
Lane PR. Financial globalisation and the crisis. Open Economies Review. 2013 Jul 1;24(3):555-
80.
Bruno V, Shin HS. Capital flows and the risk-taking channel of monetary policy. Journal of
Monetary Economics. 2015 Apr 30;71:119-32.
Magud NE, Reinhart CM, Vesperoni ER. Capital inflows, exchange rate flexibility and credit
booms. Review of Development Economics. 2014 Aug 1;18(3):415-30.
Steinkamp S, Westermann F. The role of creditor seniority in Europe's sovereign debt crisis.
Economic Policy. 2014 Jul 1;29(79):495-552.
Christiaens E. Conformity of World Bank investments with International Environmental Law.
Online
INTERNATIONAL MONETARY FUND. 2017. [Online]. Available
through:<http://economictimes.indiatimes.com/topic/International-Monetary-Fund>.
[Accessed on 6th June 2017].

International Monetary Fund. 2017. [Online]. Available
through:<http://www.dictionary.com/browse/international-monetary-fund>. [Accessed
on 6th June 2017].
INTERNATIONAL MONETARY FUND. 2017. [Online]. Available
through:<http://www.standard.co.uk/topic/international-monetary-fund>. [Accessed on
6th June 2017].
International Monetary Fund. 2017. [Online]. Available
through:<http://www.telegraph.co.uk/international-monetary-fund/>. [Accessed on 6th
June 2017].
International Monetary Fund. 2017. [Online]. Available
through:<https://en.wikipedia.org/wiki/International_Monetary_Fund>. [Accessed on
6th June 2017].

Appendix:
Q.1 How IMF works at an international platform?
a). Regulates the budgets of country's governments.
b). It performs as a forum for global economics.
c). Global exchange rates, balance of payments and multilateral payments are observed by it.
d). To promote free trade globally.
Q.2 What are the IMF prime objectives?
a). Entire promotion of global trade.
b). To promote the international trade freely.
c). To boost of its policies in main countries around the globe.
Q.3. How IMF could fulfils its key objectives?
a). By promoting global trade freely.
b). By assessing the balance of payments, acting as a forum of global negotiation and regulating
international exchange rates.
c). By performing as an arbitrator for the dispute settlement of world trade matters.
d). By aligning its main objective with the financial objectives of national government.
Q.4 Why IMF was inefficient for implementation of its policies and legal norms around the
globe?
a). As it was not able to carry states to attain consensus in specific regulatory matters and due to
the implementation of its policies has been ab initio inefficient.
b). Because various states require to promote their national interest to damage of the IMF's
efforts.
c). As the IMF cannot promote its norms in the case of trade blocks.
d). Because the IMF is not an autonomous global institution.
Q.5 Why economists have been suspected in the past for injuring the role of the IMF?
a). As they did not give priority to the calls of national governments for international fluctuation
of global exchange rate markets.

b). Because they did not pay attention to the calls from other global association for the further
liberalisation of the international exchange rate market.
c). As, they give less co-operation with the economists.
d). As, little was done by them to escape legal technicality.
Q.6 In the economic matters of the world, States generally do not correspond to the IMF
calls. Why so ?
a) Agendas of States are different
b) Political will is not there in States to follow calls of IMF
c) IMF's policies are opposed by States
d) Interests of States and IMF are not same.
Q.7 IMF's policy on exchange rates is of soft-law or hard-law in nature. Why ?
a) Soft law because of national sovereignty in the matters of currency
b) Soft law because of clarity
c) Hard law because of legal precision
d) Hard law because of global uniform standards
Q.8 Should a sovereign state inform about its Funds regarding its monetary policy decision
under Article IV of IMF's Article of Agreement ?
a) No, member state does not need to inform about Funds
b) No, member states does not need to inform about Funds but should inform about regional
monetary organisations
c) Yes, member states should inform about Funds regarding monetary policy decision
d) Yes, member states should inform about Funds regarding national economic arrangement and
monetary policy decisions.
Q.9 Does IMF is the lender of last resort?
a). Yes
b). No