International Organizations

Trade decline across the globe in the 1940s had some negative impacts. Living standards of people fell and unemployment became a chronic issue. Because of this, there was need of international organizations in the economy. As a result of the July 1944 conference, two main multinational organizations emerged: the World Bank and the International Monetary Fund (IMF). Later, the International Trade Organisation was formed to handle the trade side of the international economic organization.

International Monetary Fund

IMF lends foreign currencies to its member states, so as to aid them during a period of crisis or a period of important external deficits. Also, currencies contributed by members enable this operation to be a success. As a result, IMF’s main role is to ensure the international monetary system stability. Others include the following:

  • Promotes exchange stability
  • Aids in the establishment of multilateral system of payments
  • Ensures confidentiality among members, thus availing resources to them
  • Enables the expansion and balanced growth of international trade

The World Trade Organization

The World Trade Organization is unique in the way that it’s the only organization that regulates cross-border trade relationships across the globe. Consequently, it replaced the general agreement on tariffs and trade (GATT) in January 1995. However, GATT still exists in form of the 1994 version and its world trade organization principal treaty of trading goods. Also, its functions include:

  • Administrate, implement and operate individuals agreements, solve disputes and act as a platform for negotiations
  • Ensure transparency of trade policies by supervising global policy settings
  • Provide training and cooperation to low-income, least developed countries. As a result, this helps them adjust to the rules of the WTO.
  • Act as a source of economic analysis and research

World Bank Group

World Bank Group’s main objective is to enhance a good environment for normal economic growth and to help developing countries curb poverty. Other benefits include:

  • Provide funds for projects in developing countries
  • Ensure capabilities of its partners and individuals in developing countries
  • Help create economic infrastructure significant to domestic financial markets


Among these trade organizations, which one of them regulates cross-border trade relationship across the globe?

A. World Trade Organization

B. International Monetary Fund

C. World Bank Group


The correct answer is A.

The World trade organization is the only organization that is in charge of cross-border trade.


Reading 19 LOS 19j:

Describe functions and objectives of the international organisations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization

Click here to access 3,000 CFA practice questions.

Social Media

English | Français | Español | 普通话

© 2016 AnalystPrep  |  Our Affiliate Program  |  Terms and Services  |  Privacy Notice

CFA® is a registered trademark of CFA institute.

CFA Institute does not endorse, promote, review, or warrant the accuracy of the products or services offered by prep courses.