The global marketplace in which countries use the different structures of trading is one of the major attributes in international cooperation. Because of the significant interactions of economies towards progress, there is always a need to continuously monitor the way financial assets are utilized. In this case, financial institutions such as the World Bank will be able to effectively address the different needs of respective county members. The overall capability of the institution to solve financial problems can eventually become the most important role the department will be able to impart.
Need essay sample on
We will write a custom essay sample specifically for youProceed
The major role of the World Bank is to provide financial assistances for member countries. This aid comes in the form of capital investments which equates to monetary values. In most cases, the financial help is being utilized for the sole purpose of addressing a nation’s lack of capability to develop its own economy by using only the domestic resources it has. Because of such dilemma, it needs to acquire a substantial form of help from external resources in order to follow the strategy plan of development. The World Bank fills the gap of money resources in order to proceed with the development program of an economy. The process of providing loans is usually given to developing countries which primarily target to eradicate situational poverty in their respective territories (Wikipedia, 2007).
In the global perspective, the institution provides a significant contribution in terms of international financing operations. Several aspects of financial factors which lead to global economic stability are being influenced by how the World Bank operates. Some situational examples may be realized on how the institution plays an important role in shaping the world economic status.
First, the bank’s money lending approach provides almost instantaneous assistance to any countries which need additional funding for its project. Because of this aspect, the nation will be able to limit its necessary expenses in coping with the fund mismanagement portfolio. Such a case makes it possible for the state to allocate other funds of its budget to other important matters, therefore reducing the need to directly apply for a loan to other industrialized nations.
Another example is the effective reallocation of global assets to important projects. The World Bank serves as the basic channel in which global money is being utilized in the most efficient ways. Not only it provides convenience to the loaner but it can also provide significant profitability values for shareholders of the bank's fund. In this case, the mutual benefits are experienced by all members of the organization. It is an obvious realization the World Bank profits from poor countries (Netto, 2006). But this fact can at least be justified on how both ends of the equation benefit from it.
Lastly, the institution is able to provide greater assistance not only in the financial aspect but also in terms of building ideal economic activities. The bank always makes it a point to at least provide its recommendations and structured plans for one country to maximize the value of the fund being loaned. Although some sectors of the developing countries see it as a form of sovereignty offense, it can be observed that the promotion of a planned economic development can easily provide greater stability for a nation’s economy. Since the bank employs a team of experts in the field of financial utilization, it would be beneficial for a country to follow the suggestion of the World Bank on how to use the money. This will at least minimize cases of misallocation, budgeting concerns and possible corruption.
The risks involved in the financial sector are always present. Because of the presence of money values which are always used in any forms of transactions, it is always a burden for financial institutions to develop risk management procedures in order to divert their possible impact. For the World Bank, the main goal is to effectively diversify the funds so that the overall asset will not be compromised once a financial crisis happens. The bank manages its money in global liquidity portfolios so that only parts of the resources will be affected in each economic situation involved (World Bank Group, 2004). In this manner, the institution's assets can be easily turned into money once an economic recession occurs. What it can do is to sell its properties, shares and other physical assets in order to make up the lost money values form other losing transactions.
In another aspect, the bank also involves the creation of investment opportunities to each country members. This at least ensures the office to monitor the current financial conditions for each respective economy. When a monetary crisis breaks out, the bank can easily detect the procedures to follow in order to minimize the impact to other international assets.
Having a reliable institution such as the World Bank makes it possible for different economies to share the world's financial resources. Because of the capability of the bank to help other poor nations to develop their economies, the greater sense of worth is being justified in the creation of the office. In the future, the bank will still be able to serve the same service it has ratified in its goals while at the same time, maintaining the positive outcomes of what it has been doing today to world economies.
Do You need a paper on this topic?Order Your Essay
№8 In global rating
№11 In global rating
№2 In global rating
№10 In global rating
№7 In global rating
№1 In global rating
№12 In global rating
№9 In global rating
№5 In global rating
№3 In global rating
Order your paper now!
I asked Essay Lab to write an essay for me and received paper the next day after I ordered it! Thank you!
Awesome WORK! If I ever need to write my essay – I will use only EssayLab!
These people are lifesavers! Just ask – “write me an essay” and they will start right away!
We would be happy to write itJoin and witness the magic