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International financial transactions necessarily involve transfer of funds between parties across the national frontier, conversion of various national currencies into one another, acquisition and disposal of financial assets and lending and borrowing operations between nationals of different countries.
IMS is necessarily concerned with determination of exchange rates between different national currencies, the role of capital markets of different countries and provision of international liquidity.
The exchange rate between two countrys currencies would be determined by their relative gold contents.
$30 = 6
$5 = 1
Price-Specie-Flow Mechanism
Suppose Great Britain exported more to France than France imported from Great Britain.
Net export of goods from Great Britain to France will be accompanied by a net flow of gold from France to Great Britain. This flow of gold will lead to a lower price level in France and, at the same time, a higher price level in Britain.
The resultant change in relative price levels will slow exports from Great Britain and encourage exports from France.
The goal was exchange rate stability without the gold standard.
The result was the creation of the IMF and the World Bank.
Settlement means the settlement of payment instructions received & these include settlement of securities, forex or derivatives or other transactions. Types of settlements Settlement system in India
Settlement system in US
Federal reserve communication system (FEDWIRE) It intro a new system FRS-80 after which there was a rapid increase in settlement volume
2 facilities:
Transfer btw reserve deposit accounts of all financial institutions in the US with their affiliates. Transfer of govt. related securities is used in transfer of treasury bills, federal agency securities and accompanying settlements
Distinctive feature: payments are irrevocable i.e., once the payment is made it is legally final and the receiving banks receipt of the fund is guaranteed not to be changed or cancelled.(this is called FINALITY OF PAYMENT)
It is presently a centralized settlement system processing more than 90% of the dollar based international transactions.
Process of CHIP
Payment instructions are sent out & received continuously during the day. Each member banks net balance continues to fluctuate, but at the cut off time, each settlement bank fixes its own net balance The fixed net balance is then settled btw the chips account & the banks account with federal reserve bank of new york through FEDWIRE. The settlement is done before the settlement closes and as a result the chips acconut balance become zero.
Settlement system in UK
The main settlement system among banks or btwn banks & the central bank in UK is Clearing House Automated Payment System (CHAPs).
CHAP is a settlement system operated by 14 settling banks including the Bank of England and was estbd as an effective means of making settlements in transactions done in London financial market.
The transactions are irrevocable and all are settled on the same day.
WORLD BANK
The world bank is an internationally supported bank that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools)with the stated goal of reducing poverty.
INTRODUCTION
President Membership :- Jim Yong Kim :- 188 countries
Affiliates
WB
Promotes economic development in underdeveloped countries. Helps underdeveloped countries by providing longterm financing for development projects.
Financial resources come from the fixed quota subscriptions of its member countries.
IMF
Assists all its member countries that are in temporary balance of payments difficulties by providing them short- to medium-term credits. Has a total staff of 2,300 from 185 countries.
WB
Provides special finances to poor countries that have a per capita Gross National Product (GNP) less than $865 a year.
What We Do:
Provide professional services for project development and financing, turning project concept into reality through world call partnerships best qualified for projects.
Identify unique and commercially feasible projects worldwide and promote their realization through teaming with specialized U.S. and international equipment manufacturers and technology providers and effectively transferring western capital resources, expertise and technologies to emerging economies. For every specific project identify team of leading, most experienced and technologically advanced industry players. Use extensive international network and collective expertise of experienced and highly motivated multilingual international business executives for successful project development in various countries.
Our Organization:
The Company international network is managed through IDC headquarters in Arlington, U.S. state of Virginia, with offices and representatives operating in Athens (Greece), Almaty (Kazakhstan), Moscow (Russia), Nice (France), Pretoria (South Africa), Stowe (Massachusetts) and Vilnius (Lithuania). For implementation of projects of high complexity we operate through partnerships set up under the umbrella of the IDC GROUP, the brand that was established almost ten years ago. IDC is also a co-founding member of the IDC Group GES (Global Energy Solutions), established in November 2012 for application of advanced power generation technologies and development of renewable energy projects.
IFC is part of the World Bank Group (WBG), and the largest global development finance institution (DFI) focused on developing the private sector in low-income and other emerging markets. Its purpose is to create opportunity for people to escape poverty and improve their lives. This document comprises IFCs written submission to the Australian Multilateral Assessment (AMA), and is structured as follows.
IFC History
Six decades of creating opportunity Created in 1956.
IFC is the largest organization of its kind. Holds $48.8 billion portfolio touching almost every major industry. Reach millions of people in over 100 countries.
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What We Do
Investment Services
In FY11, IFC invested $12.2 billion and 518 projects Mobilized an additional $6.5 billion to support private sector in development countries.
Mobilizes and manages funds on behalf of institutional investors including sovereign funds, pension funds, and development finance institution. As of June 30, 2011 had approximately $4.1 billion in assets under management.
Funds include
IFC Capitalization Fund IFC Africa, Latin America and Caribbean Fund The African Capitalization Fund
Advisory Services
Business Lines:
Access to Finance Investment Climate Sustainable Business Public-Private Partnerships
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Private sector, with strong sponsor commitment Financially, economically, environmentally, and socially sound Maximum IFC share (excluding syndications)
25% of project cost over $50 million 35% of project cost under $50 million 40% of project costs for expansion projects
Investment size
Typically $5 million to over $100 million
Projects and IFCs investment are expected to earn competitive and commercial rates of return:
Comprehensive security package required for loans Reasonable exits are expected for IFC equity and quasi-equity investments
Expert IFC teams work closely with the client to finalize the investment
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