WHY DO BRETTON WOODS’ INSTITUTIONS EXIST AT ALL? THE INTERNATIONAL MONETARY FUND AND THE WORLD BANK HAVE BEEN PART OF THE INTERNATIONAL FINANCIAL SYSTEM/ARCHITECTURE FOR THE PAST SEVEN DECADES

Today, the institutions created inBretton Woods, the International Monetary Fund(IMF) and the World Bank, are global institutionsdue to membership that includes almost allcountries (187) in the world. Both institutions arepublic – they are funded by public funds of all themember countries. They were founded and exist dueto a vision of global solidarity – the mutualassistance of all countries in the world. Theprevailing opinion is that the rationale for theseinstitutions’ mandates is generally related to thedeveloping countries. This is true for the WorldBank, provided it finances long-term developmentprojects. However, it is questionable whether thesame may be said for the IMF and its mandate.Since its foundation, the IMF has had a special rolein the international financial system, that ofproviding global public goods - the system stability.At the global level, the IMF is in the best position toperform regular annual surveillance for each of itsmembers. The results of these bilateralconsultations are the IMF’s advice andrecommendations related to adequatemacroeconomic policies that member states shouldimplement domestically, which will at the sametime prevent “beggar your neighbor” practices. Asa Stand–by lender, the IMF is ready to provide (ina reasonable short period) financial assistance forall its member countries to address their temporarymacroeconomic imbalances.