The International Bank for Reconstruction and Development - IBRD (or World Bank), aims to reduce poverty in middle-income countries and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services. Established in 1944 as the original institution of the World Bank Group, IBRD is structured like a cooperative that is owned and operated for the benefit of its 188 member countries. Only International Monetary Fund (IMF) member countries may be members of the IBRD. The IBRD is the main multilateral development bank in the world.
Established with the IMF, headquartered in Washington, following the Bretton Woods Agreements (the third world organization was World Trade Organization- WTO created in 1995 after the General Agreement on Tariffs and Trade-GATT). The IBRD is part of the World Bank Group together the International Development Association (IDA), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA) and International Centre for the Settlement of Investment Disputes (ICSID).
The IBRD is governed by the World Bank's Board of Governors which meets annually and consists of one governor per member country (most often the country's Finance Minister or Treasury Secretary). The Board of Governors delegates most of its authority over daily matters such as lending and operations to the Board of Directors. The Board of Directors consists of 25 Executive Directors and is chaired by the President of the World Bank Group. The U.S. are the largest shareholder of the IBRD, with 16.41%, and it appoint the President who traditionally gives them the right of veto decisions on the change in the composition of capital (for which it is required a majority of 85 %). Followed by Japan (7.87% ), Germany (4.49 %), France and the UK (4.31% each), China, India, Italy, Russia, Saudi Arabia (2.79% each), Brazil (2.07% ), Spain (1.75% ) and Switzerland (1.66%). The EU countries formally own 25.63 % while the Eurosystem 19.53 %.
Initially formed to contribute financially to the reconstruction of production facilities destroyed by II World War, especially in Western Europe (the first loan of 250 million U.S. dollars was made for France in 1947) then moved to finance construction of infrastructure or of directly productive activities (industrial, mining, commercial and agricultural). Beginning in the sixties (and especially under McNamara chairmanship), like other, multilateral development bank, the IBRD starts to funds initiatives to reduce poverty, for projects related to health and education, about good governance, to protect the environment, to encourage the development of private initiative, to support reform policies and the consolidation of the economic environment. Exceptionally IBRD also executes help the balance of payments of the developing countries. The IBRD is financed by medium-long term loans and short-term transactions in market conditions (mainly in U.S. dollars, euro, yen). It grants loans at market conditions. Loans are the foreign debt of the debtor countries. IBRD raises most of its funds on the world's financial markets and has become one of the most established borrowers since issuing its first bond in 1947. The income that IBRD has generated over the years has allowed it to fund development activities and to ensure its financial strength, which enables it to borrow at low cost and offer clients good borrowing terms. The bank also gives technical assistance and advisory services in economic policy.
Editor: Giovanni AVERSA