WorldBank Multipolarity - Part.1

The World Bank was established in 1944 at the Bretton Woods Conference alongside the International Monetary Fund (IMF). Its initial purpose was to help rebuild war-torn Europe after World War II, but it soon shifted focus to economic development in poorer nations. The World Bank comprises two main institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Over time, it expanded to include additional arms like the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). Its primary mission is poverty reduction and sustainable development, offering loans, grants, and technical assistance across sectors like infrastructure, health, education, and climate resilience.

The Bank for International Settlements (BIS), on the other hand, was founded in 1930 to facilitate Germany’s reparation payments after World War I and to promote central bank cooperation. Headquartered in Basel, Switzerland, the BIS has evolved into the “central bank for central banks,” providing a forum for monetary and financial stability discussions, particularly among advanced economies. Unlike the World Bank, it does not fund development projects or lend directly to countries. Instead, it supports central banks through research, coordination, and banking services. BIS has key regional offices in Hong Kong SAR and Mexico City, and its influence extends globally through partnerships with central banks and international financial institutions.

While both institutions publish financial statements, the BIS’s and World Bank’s balance sheets differ from commercial banks. They are not profit-maximizing entities and their core functions involve policy, coordination, and development rather than traditional banking. BIS holds deposits and acts as a counter-party for central banks rather than engaging in retail or corporate lending. The World Bank raises funds via bond issuance on international markets and uses these to support its operations in developing countries, focusing on long-term impact rather than short-term profit. Their decision-making bodies are composed of member states (or their representatives), and major decisions involve setting development priorities (World Bank) or coordinating financial stability and regulatory standards (BIS).