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The World Bank and the International Monetary Fund (IMF) are together known as the:
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Answer: Option A — Bretton Woods institutions
Detailed Solution
The World Bank and the International Monetary Fund (IMF) were both created at the United Nations Monetary and Financial Conference, held at Bretton Woods, New Hampshire, USA, in July 1944. Delegates from 44 Allied nations attended the conference, while the Second World War was still being fought. The British economist John Maynard Keynes and the American official Harry Dexter White played leading roles. Because of this, the two organisations are called the "Bretton Woods institutions" or the "Bretton Woods twins". India took part in the conference and is a founding member of both.
The aim was to build a stable international economic system after the war, avoiding the problems of the 1930s, such as the Great Depression, competitive currency devaluations and trade wars.
The International Monetary Fund (IMF):
Began operations in 1945-47. Headquarters: Washington, D.C.
Works to ensure the stability of the international monetary system, exchange rates and international payments.
Provides short-term loans to member countries facing balance of payments problems, often with conditions for economic reforms. India took IMF loans in 1981 and 1991.
Created Special Drawing Rights (SDRs) in 1969 as an international reserve asset.
Publishes the World Economic Outlook and the Global Financial Stability Report.
The World Bank:
Began with the International Bank for Reconstruction and Development (IBRD) in 1944, to help rebuild Europe after the war. Headquarters: Washington, D.C.
Today, the World Bank Group has five institutions, including the IBRD and the International Development Association (IDA), which provides concessional loans to the poorest countries. It funds long-term development projects and aims to end extreme poverty.
By tradition, the President of the World Bank is an American and the Managing Director of the IMF is a European. Ajay Banga, of Indian origin, became President of the World Bank in 2023, and Kristalina Georgieva heads the IMF.
Why not the other options?
- ✗The Paris Club is an informal group of creditor countries.
- ✗"Washington Twins" and "Breton Twins" are not standard names.
Quick tip
Remember: Bretton Woods Conference (July 1944) = IMF and World Bank (both in Washington, D.C.); IMF = balance of payments help and SDRs; World Bank President Ajay Banga (2023).
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International Economic Organisations — Preparation
This question tests your understanding of International Economic Organisations, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.
This topic covers international economic and financial organisations: the IMF, the World Bank group, the WTO, the Asian Development Bank, the New Development Bank, the AIIB, OPEC, the OECD and groupings such as the G20, along with their headquarters, founding and functions. Questions usually ask where an organisation is headquartered, when it was set up, and what it does. For example, the IMF and World Bank were created at the Bretton Woods Conference in 1944, the WTO replaced GATT in 1995, and the New Development Bank, set up by the BRICS countries, is headquartered in Shanghai. Practise the international economic organisations questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.