IMF - How Does It Work?

[pi3141]

Don't know a great deal about this

I'm reading up on it.

 

From Wiki - 

 

The International Monetary Fund (IMF) is an international financial institution and a specialized agency of the United Nations, headquartered in Washington, D.C. It consists of 191 member countries, and its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world."[1]

 

The IMF acts as a lender of last resort to its members experiencing actual or potential balance of payments crises.[9]

 

Ok, where does the money come from?

 

Through a quota system, countries contribute funds to a pool from which they can borrow if they experience balance-of-payments problems; a country's quota also determines its voting power.[12] As a condition for loans, the IMF often requires borrowing countries to undertake policy reforms, known as structural adjustment.[13] The organization also provides technical assistance and economic surveillance of its members' economies.[14]

 

How much does UK pay?

 

The UK contributes to the IMF through member country quotas, with a current maximum commitment of approximately £31.64 billion (SDR 30.2 billion) after a recent increase. This amount is based on the UK's economic size and serves as the country's legislative ceiling for lending to the IMF. Additionally, the UK has made specific, separate pledges to provide funding for IMF trusts, such as a $670 million pledge to the Poverty Reduction and Growth Trust. 

IMF quota subscription
The UK's contribution is based on its quota, determined by its economic size.

A recent draft order increased the UK's subscription ceiling to SDR 30.2 billion, which was approximately £31.64 billion at the time.

This commitment allows the UK to lend to the IMF, which in turn provides financial assistance to other countries in need. 

 

According to AI - 

 

How it works:

 

This is a commitment ceiling for potential financing, not an upfront payment. The IMF can call on these funds through quota subscriptions when needed, which are essentially loans that can be refunded.

 

 

 

So do we actually give this money to IMF who put it in an account in case we, or other countries want to borrow?

 

Do we just 'set aside' the money in case some country needs to borrow it?

 

Do we have 10's of billions of pounds in an IMF account from paying in yearly?

 

Do we have 31.64 Billion pounds in a holding account somewhere for this year's contribution?

 

Do we get our money back?

 

If there is a succession of collapses in countries who borrow from the UK through the IMF, and it triggers a global collapse, can the IMF still bail us out?

 

I'm not getting this arrangement, seems simple but how does it actually work, do we physically pay the money or just pledge it?

 

If its pledged, where is it held and what happens to it?

 

Do we just have Billions of pounds in an account that periodically we have to increase with new quota but otherwise its completely untouched?

 

Are we owed anything from giving assistance previously to other countries. 

 

South American countries owe the IMF 162 Billion dollars. Who does the IMF owe that money to?

 

 

Can anyone explain it to me?

 

[Grumpy Owl]

50 minutes ago, pi3141 said:

So do we actually give this money to IMF who put it in an account in case we, or other countries want to borrow?

 

Do we just 'set aside' the money in case some country needs to borrow it?

 

Do we have 10's of billions of pounds in an IMF account from paying in yearly?

 

Do we have 31.64 Billion pounds in a holding account somewhere for this year's contribution?

 

Do we get our money back?

 

If there is a succession of collapses in countries who borrow from the UK through the IMF, and it triggers a global collapse, can the IMF still bail us out?

 

I'm not getting this arrangement, seems simple but how does it actually work, do we physically pay the money or just pledge it?

 

If its pledged, where is it held and what happens to it?

 

Do we just have Billions of pounds in an account that periodically we have to increase with new quota but otherwise its completely untouched?

 

Are we owed anything from giving assistance previously to other countries. 

 

South American countries owe the IMF 162 Billion dollars. Who does the IMF owe that money to?

 

 

Can anyone explain it to me?

 

 

I don't know either, and I too would appreciate if anyone has a definitive answer!

 

Because to me, like with most things on this scale, it all sounds like 'virtual money', and thus is all part of the global financial scam that is sucking all the wealth from the world.

 

It's like when we hear about the UK government 'borrowing money' in order to meet spending commitments. But it's never explained exactly who this money is being 'borrowed' from, and thus who it has to be paid back to, with interest of course.

 

The most sinister aspect to the IMF of course is this nugget:

 

Quote

As a condition for loans, the IMF often requires borrowing countries to undertake policy reforms, known as structural adjustment.[13]

 

Also known as 'fall in line with the Agenda' 

[pi3141]

2 hours ago, Grumpy Owl said:

Also known as 'fall in line with the Agenda' 

 

Exactly. 

 

Its obviously largely unaccountable, its 'private' but only has government pledged funds.

 

Why do we, the UK, not just put 20 Billion pounds aside into an account we own fir contingency. 

 

Why do we give it to them?

 

It must be like insurance, if lots of people pay in, then if a small number make a claim, there's enough funds to pay out.

 

So it becomes a sort of insurance scam, but when you make a claim, they dictate how you spend it, they demand certain policy reforms. 

 

But they are unelected, they are not politicians. 

 

They lend to dictatorship to keep them in power.

 

If they are economic experts why aren't they advising governments long before they get into economic problems.

 

Who gave them this power?

 

[Campion]

My first thought was, if the money is just lent out to countries in a crisis and then paid back when they get out of the crisis (maybe with interest?), why do we keep having to pay in a big annual commitment?  Isn't the money recycled back to the IMF and only needs topping up by a small amount each year?  I'd worry about money "disappearing" somewhere when that much gets paid in every year and there's no surplus. 

 

Ok some countries like in South America haven't paid what they owe to the tune of $162 bn which accounts for some of it. So there's effectively a transfer of funds to those countries, but are there any controls on what they do with it?  It may be used to just prop up a failing economy, or a way to put it under the radar and as Grumpy says, into funding the agenda.