Evaluating The Role Of International Financial Institutions In Maintaining Financial Stability

Abstract

This paper examines the functions of IFIs specifically the IMF, World Bank, and BIS in relation to balance of payments in the international financial system. Employing a cross-sectional research methodology, the study analyzes IFI interventions during the Asian Financial Crisis (1997), the Global Financial Crisis (2008), and the COVID-19 pandemic. It evaluates data related to GDP growth, capital flows, and systemic risk measures, and finds that IFIs have a highly positive impact on economic recovery and financial system stability. The study also highlights the importance of advanced technologies, such as big data, machine learning, and artificial intelligence, in improving IFI capacities for evaluating and forecasting financial stability. However, it reveals issues with data quality, methodological limitations, and policy-data gaps, particularly from developing countries where IFIs are crucial. Recommendations are provided for enhancing data acquisition, openness, and the use of big data analytics, along with directions for further research in prognostic modeling and crisis anticipation.