Problem
Interference of transnational banks in domestic economic policies
Nature:
Transnational banks generally seem to prefer to lend to a country that is in agreement with the International Monetary Fund about the policies to be pursued under stand-by agreements. There are two reasons for this. First, lending to a nation that is in compliance with International Monetary Fund arrangements helps the transnational banks with their home country banking authorities. Second, without directly setting economic policy, the banks can be reassured that it meets the rather well-known requirements of the International Monetary Fund for balance-of-payments solvency. When a nation is unwilling to submit to International Monetary Fund stand-by agreements and commitments, however, the banks very often make their exposure conditional on commitments as to the particular economic policy that the borrowing country will put into effect in order to secure further loans.
Broader Problems:
IntrusionUnethical banking practicesAntiquated regulations in the banking industry Narrower Problems:
Interference of transnational banks' off-shore borrowing with domestic monetary policies Values:
InterferenceUneconomic Subject(s):
Commerce → BankingCommerce → Multinationals
Economics → Economic
Policy-making → Policy
Related UN Sustainable Development Goals:
Problem Type:
E: Emanations of other problems Date of last update
15.09.2019 – 20:12 CEST