What is 'The World Bank'

The World Bank is an international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement. The World Bank was created out of the Bretton Woods agreement as a result of many European and Asian countries needing financing to fund reconstruction efforts. As of 2016, the Bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle- and poor-income countries.

BREAKING DOWN 'The World Bank'

The World Bank is a provider of financial and technical assistance to developing countries around the globe. The bank considers itself a unique financial institution that provides partnerships to reduce poverty and support economic development by giving loans and offering advice and training to both the private and public sectors. The World Bank was established in 1944, is headquartered in Washington D.C., and has more than 10,000 employees in over 120 offices worldwide.

The Structure of The World Bank

The World Bank has expanded from the single institution that was created in 1944 to a group of five unique and cooperative institutional organizations. The first organization is the International Bank for Reconstruction and Development (IBRD) , an institution that provides debt financing to governments that are considered middle income. The second organization within The World Bank is the International Development Association (IDA), a group that gives interest-free loans to governments of poor countries.

The International Finance Corporation (IFC), the third organization, focuses on the private sector and provides developing countries with investment financing and financial advisory services. The fourth part of The World Bank is the Multilateral Investment Guarantee Agency (MIGA), an organization that promotes foreign direct investments in developing countries. The fifth and final organization is the International Centre for Settlement of Investment Disputes (ICSID), an entity that provides arbitration on international investment disputes.

The Goals and Benefits of The World Bank

The World Bank has two stated goals that it aims to achieve by 2030. The first is to end extreme poverty by decreasing the amount of people living on less than $1.90 a day to below 3% of the world population. The second is to increase overall prosperity by increasing the income growth in the bottom 40% of the world's population.

Beyond its specific goals, the World Bank provides qualifying individuals and governments with low-interest loans, zero-interest credits and grants. These debt borrowings and cash infusions help with global education, health care, public administration, infrastructure and private sector development. The World Bank also shares information with world governments through policy advice, research and analysis and technical assistance.

RELATED TERMS
  1. World Bank Group

    Five international organizations dedicated to providing financial ...
  2. International Finance Corporation

    The International Finance Corporation is an organization dedicated ...
  3. International Finance

    Definition of international finance
  4. Multilateral Investment Guarantee ...

    An organization established in 1988 by the World Bank and based ...
  5. Third World

    A phrase commonly used to describe a developing nation, but actually ...
  6. Bank For International Settlements ...

    An international organization fostering the cooperation of central ...
Related Articles
  1. Insights

    What Is The World Bank?

    You've heard of the World Bank, now find out how it functions and why some groups oppose it.
  2. Insights

    Confused How The IMF, World Bank, & WTO differ?

    From loans to Athens and trade deals in Asia to economic reports on the world’s most successful and most troubled economies, these organizations make headlines across the globe
  3. Insights

    World Bank Data For Dummies

    Developing countries can't always afford to track the data crucial to setting the right economic policies and programs. That's where the World Bank steps in.
  4. Personal Finance

    What Is The Bank For International Settlements?

    Get the scoop on the structure and functions of the oldest global financial institution.
  5. Insights

    Why World Bank is Pessimistic About Global Economy

    The World Bank and International Monetary Fund have once again downgraded global growth expectations for 2016.
  6. Insights

    Inspecting A Country's Debt

    Tensions over just how to handle debt are pitting the rich world against the developing world like never before.
  7. Insights

    Understanding the Bretton Woods Agreement

    The Bretton Woods Agreement is a famous international monetary agreement that came out of a meeting of the UN Monetary and Financial Conference.
  8. Personal Finance

    Retail Banking Vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate customers.
  9. Insights

    Which Are the World's 10 Largest Private Banks?

    Most of the largest private banking providers in the world are headquartered in Europe or the United States.
  10. Personal Finance

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
RELATED FAQS
  1. What is the difference between International Monetary Fund and the World Bank?

    Learn about the International Monetary Fund and the World Bank and how they are differentiated by their respective functions ... Read Answer >>
  2. What developed countries have the highest concentration in the banking sector?

    Learn about the developed countries that have the greatest concentration in the banking sector and the most important emerging ... Read Answer >>
  3. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
  4. What countries represent the largest portion of the global banking sector?

    Learn how four countries, China, the U.K., France and the U.S., exhibit the greatest influence over the global banking sector, ... Read Answer >>
  5. Is France a developed country?

    Discover what qualifies France as a developed country and how its diverse economy has helped it become one of the largest ... Read Answer >>
  6. How does investment banking differ from commercial banking?

    Discover how investment banking differs from commercial banking, the responsibilities of each and how the two can be combined ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center