Central banks normally have control over interest rates and support the stability of the financial system.
Collaboration between central banks is supported by the Bank of International Settlements (BICS).
In the context of international trade, a key role of the central bank is to guarantee the convertibility of a currency (eg from £s to $s).
The International Monetary Fund (IMF)
The IMF's main purpose is to support the stability of the international monetary system by providing support to countries with balance of payments problems; most countries are members.
Where a member is having difficulties overcoming balance of payments problems the IMF will:
offer advice on economic policy
lend money, at subsidised rates to finance short-term exchange rate intervention
IMF loans are conditional on action being taken to reduce domestic demand, and are normally repayable over a five-year period.
The IMF has been criticised as being controlled by those who don’t need funds, for failing to control its own costs and for holding on to its substantial gold reserves.
The World Bank
The World Bank, partially funded by the IMF, exists to fund reconstruction and redevelopment.
Loans are normally made directly to governments, for periods of 10-20 years and tied to specific projects.
The International Bank for Reconstruction and Development (IBRD)
Popularly known as the World Bank, it was also created at Bretton Woods in 1944, with the aim of financing the reconstruction of Europe after the Second World War.
The World Bank is now an important source of long-term low interest funds for developing countries.
The Bank for International Settlements (BIS)
Established in Basle, Switzerland in 1930, it acts as a supervisory body for central banks assisting them in the investment of monetary assets.
It acts as a trustee for the IMF in loans to developing countries and provides bridging finance for members pending their securing longer term finance for balance of payments deficits.