After the Second World War most of the European countries were devastated and international monetary cooperation was felt necessary.
A system of external finance and stable exchange rate was required to tackle the unfavourable balance of trade. An International Economic conference was held at Bretton Woods in 1944.
At this conference it was decided to set up three institutions namely International Monetary Fund, International Bank for Reconstruction and Development and International Finance Corporation.
All these institutions perform several inter-related functions such as lending funds, providing advice and stimulating investments by others.
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The International Bank for Reconstruction and Development (World Bank)
The International Bank for Reconstruction and Development (IBRD) was established at the International Economic Conference held at Bretton Woods in July, 1944.
Its headquarter is situated in Washington D.C. (U.S.A.). The Bank is a specialised agency for international monetary cooperation.
The main objective of the Bank is to assist in the economic development of the member countries and to help raise the standard of living in developing countries by channelizing financial resources from developed countries to developing countries.