International Monetary Fund (IMF)

The International Monetary Fund (IMF) is an international governmental organization, operating as a specialized agency of the United Nations Organization. Headquartered in Washington, D.C., the IMF was established to manage the international financial and balance of payments systems and to help its members manage their currencies and national financial accounts. As outlined in the IMF's charter, its articles of agreement, the institution's primary purposes include the promotion of international monetary cooperation and exchange stability, thereby aiding the expansion of international trade and ultimately the overall economic prosperity of its members by helping to maintain high levels of employment and increase levels of real income.

The IMF's membership comprises only countries, those recognized as sovereign nation-states. There is no provision for joint membership of economic or monetary unions of states, such as the European Union. Rather, individual states join as independent members. Membership has grown from 29 states, at the IMF's founding in December 1945, to a total of 184 states as of June 2005.

The IMF was to become one of a trio of international economic organizations (what Sir Joseph Gold, a leading international lawyer handling the novel legal affairs of the IMF from its inception, called a “trinity of comparable institutions”) envisaged near the end of World War II. These three institutions—a cooperative monetary fund, a development bank, and a global trade organization—were together to help rebuild the national and international economies devastated by the war and to ensure that the economic ravages of the Depression era that presaged the war would not recur.

The IMF the and International Bank for Reconstruction and Development (IBRD, otherwise known as the World Bank) were crafted during a meeting of 45 government representatives at Bretton Woods, New Hampshire, in July 1944. Led by Lord John Maynard Keynes of the United Kingdom and Harry Dexter White of the United States, charters for these two institutions were drafted to manage the international economic affairs of member states. These two institutions are thus commonly referred to as the Bretton Woods sisters. (The third institution was stillborn: The global trade organization's charter, drafted in 1947, found insufficient political support, and in its place was crafted the General Agreement on Tariffs and Trade, or GATT, which came into force in 1967 and finally evolved into the World Trade Organization, or WTO, only in 1995.)

Under the articles of agreement, ultimate authority for the functioning of the IMF resides with its board of governors. This board comprises one governor plus one alternate governor, appointed by each member, and meets annually. The managing director of the IMF is appointed by the governors and acts as the board of governors' chair. Though the governors gather together formally only once each year, provision is made for communication and voting between annual sessions. In practice, significant power has been delegated by the governors to a board of executive directors (currently numbering 24), who, with the IMF staff under the leadership of the managing director and three deputy managing directors, direct dayto-day operations and decide how best to manage IMF resources.

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