International Financial Institutions

The Global Infrastructure Facility (GIF) is a partnership between governments, multilateral development banks, private sector investors, and financiers. The GIF provides comprehensive project support by utilizing the combined expertise of its technical and advisory partners, including commercial banks and institutional investors. This ensures that well-structured and bankable infrastructure projects are brought to market sustainably, meeting the needs of governments and service users. The GIF partnership is overseen by a Governing Council that supervises strategic programming and funds management, as well as the development of operational policies and procedures. Additionally, the Governing Council holds the GIF's management accountable for delivering on objectives and principles. The Governing Council is composed of representatives of funding and technical partners, as well as representatives of emerging markets and developing economies. It is co-chaired by the World Bank Group and a Funding Partner.

The SDR is an international reserve asset created by the International Monetary Fund (IMF) and not a single currency. Its value is based on a basket of five major world currencies - US Dollar (USD)
- Euro (EUR)
- Japanese Yen (JPY)
- British Pound Sterling (GBP)
- Chinese Renminbi (RMB) (added in 2016) The IMF reviews the composition of the SDR basket every five years to ensure it reflects the relative importance of currencies in the global trading and financial system. The inclusion of the RMB in 2016 signified the growing importance of the Chinese economy in the world.

It is published by the World Bank. Ease of Doing Business Index: This index was a global ranking that assessed the regulatory environment for business startups and operations in different economies. It measured regulations in areas like starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. Note: The World Bank discontinued the Ease of Doing Business Index in 2021 due to concerns about data irregularities in some past reports.

The 'Global Financial Stability Report' is prepared by the International Monetary Fund (IMF). The Global Financial Stability Report is a semiannual report published by the IMF that assesses the stability of the global financial system and emerging market financing. It highlights potential risks and vulnerabilities in the financial system and provides policy recommendations to promote financial stability.

Statement 1 is Correct. The International Finance Corporation (IFC) is indeed an arm of the World Bank Group, a group of five international organizations that work together to fight poverty and promote sustainable development. The IFC specifically focuses on encouraging growth in the private sector of developing countries. Statement 2 is Correct. Masala bonds are rupee-denominated bonds issued by foreign entities (public or private sector) outside of India. These bonds raise capital for the issuer in Indian rupees, providing an alternative funding source. Therefore, the correct answer is 1 and 2 both are correct.

Statement 1 is Correct: The International Monetary and Financial Committee (IMFC) serves as a vital forum for discussing global economic issues and providing guidance to the International Monetary Fund (IMF). It brings together finance ministers, central bank governors, and other high-level officials from member countries to discuss challenges and opportunities facing the global economy. They also advise the IMF on its policy direction and work program. Statement 2 is Correct: The World Bank, while a separate institution, collaborates closely with the IMF. While not a formal member of the IMFC, the World Bank typically participates as an observer in IMFC meetings. This allows for better coordination and exchange of information between the two institutions on matters of mutual interest, such as global economic stability and development. Hence, option C is the correct answer.

The European Stability Mechanism (ESM) is an intergovernmental organization located in Luxembourg City, which operates under public international law for all eurozone Member States having ratified a special ESM intergovernmental treaty. It was established on 27 September 2012 as a permanent firewall for the eurozone, to safeguard and provide instant access to financial assistance programmes for member states of the eurozone in financial difficulty, with a maximum lending capacity of 500 billion.

Statement 1 is Incorrect: At the fourth BRICS Summit in New Delhi (2012), the leaders of Brazil, Russia, India, China, and South Africa considered the possibility of setting up a new Development Bank to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, as well as in developing countries. Statement 2 is Correct: The bank is headquartered in Shanghai, China. Hence, option B is the correct answer.

The "Global Economic Prospects" report is issued periodically by the World Bank.
It report that examines global economic developments and prospects, with a special focus on emerging markets and developing economies. It is issued twice a year, in January and June.

The organization that brings out the publication known as 'World Economic Outlook' is the International Monetary Fund (IMF).