Which of the following organizations play an active role to prevent the contagion situation of crisis, such as the Greek Sovereign debt crisis ?
IMF
Option 1 — IMF is correct.
The International Monetary Fund (IMF) is the global institution charged with safeguarding international monetary and financial stability. When a member faces a balance-of-payments or sovereign-debt crisis, the IMF provides emergency financing (bailout packages) tied to policy conditions, precisely to stop the crisis from spreading — the “contagion” — to other countries and markets. In the Greek sovereign-debt crisis the IMF was part of the “Troika” (with the European Commission and European Central Bank) that arranged rescue loans.
Why the other options are wrong:
| Body | Primary role |
|---|---|
| World Bank | Long-term development finance and poverty reduction, not crisis firefighting |
| WTO | Rules and negotiations for international trade |
| UNCTAD | Trade and development policy analysis and advocacy for developing nations |
None of these three provides the short-term liquidity and stabilisation support needed to contain financial contagion.
Takeaway: The IMF is the lender-of-last-resort body that steps in to contain sovereign-debt crises and their contagion.
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