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.

  1. World Bank Group

    The World Bank Group is the world's most prominent development ...
  2. Multilateral Development Bank - ...

    Multilateral Development Bank (MDB) is an international financial ...
  3. Australian Bankers Association ...

    An association of banks that work on behalf of its member financial ...
  4. International Poverty Line

    An international monetary threshold under which an individual ...
  5. International Bank Of Reconstruction ...

    A component of the United Nation's World Bank Group that was ...
  6. Third World

    Third World is a phrase commonly used to describe economically-developing ...
Related Articles
  1. 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.
  2. Insights

    IMF, WTO and World Bank: How Do They Differ?

    Understand what IMF, WTO and the World Bank are, how they differ, and why some people question their motives.
  3. Personal Finance

    What Is The Bank For International Settlements?

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

    The World Bank's All-Important World Development Indicators (WDI)

    The World Development Indicators are the world's economic scorecards: they evaluate where nearly every country stands and how far it has yet to go.
  5. Personal Finance

    Retail Banking vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking refers to the aspect of banking that deals with corporate customers. Check out more on the differences between ...
  6. 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.
  7. Insights

    The 4 Biggest Chinese Banks

    Learn how the Chinese banking system is operated and managed, and get information about the top four largest banks in the country.
  8. Insights

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
  9. Insights

    What Do the Federal Reserve Banks Do?

    These 12 regional banks are involved with four general tasks: formulate monetary policy, supervise financial institutions, facilitate government policy and provide payment services.
  10. Personal Finance

    Banking Has Changed: What Does It Mean For Consumers?

    Banks have long been leading spenders on technological innovations. Learn the key changes in the banking industry and what institution is right for you.
  1. The Difference Between the 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 is the banking sector?

    Why the banking sector is a vital industry, what it does to drive economic growth and examples of companies in this sector. Read Answer >>
  3. What are The Nine Major Financial Institutions?

    There are nine major types of financial institutions. Understand these major types of financial institutions that exist in ... Read Answer >>
  4. 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 >>
  5. What is the difference between an investment and a retail bank?

    Learn the primary differences between retail banks and investment banks by examining the business activities, type of clients ... Read Answer >>
  6. What proportion of the global economy is comprised of banks?

    Read about the size and scope of the global banking sector, its importance and why it should continue to form a sizable portion ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center