Development banking

2008

This chapter provides insights into the scientific and development policy debates about development financeover the last 30 years, with Latin America providing the empirical background. Development theory and policy, including financing for development, are discussed by comparing theories rather than on a regional basis, so that the general questions on the development of financial systems and microfinance in the development process and the role of international cooperation stay in the foreground. A second volume with selected articles on rather macro economic subjects with the title: “Dependencia, monetary economics and global responsibility” is to appear to complement the present one. Since these observations are based on a variety of contexts, they may appeal not only to graduate students, but also to those involved with the management of banks and microfinance institutions, development cooperation practitioners, and the general public. This volume thus follows neither strict sys...

Proceedings of the 2019 International Conference on Management, Education Technology and Economics (ICMETE 2019), 2019

The article deals with the evolution of development banks and their activities in the modern era. When collecting and processing materials for the article, the authors use general scientific methods of research (generalization, aggregation, classification, comparison), and methods of economic processes forecasting. The authors conclude that development banks are historically established investment financial institutions. The process of the development banks evolution includes four main stages, each of which reflects the socioeconomic features. Development banks in the XXI century are established on a regional and parity basis by economically developed countries. The authors indicate strategic areas of the development banks activity at present stage, in particular, financing innovative and infrastructure projects in the transport, telecommunications and energy sectors, financing small and medium-sized business development projects, and providing social protection to the population.

Internacional journal of Political Economy , 2021

Since the 2007/2008 financial crisis, State-owned financial institutions (SFIs) have reinforced their essentiality for countercyclical actions. This article argues that SFIs are vital for the development process of peripheral countries not only because they correct market failures and have the pre- rogative to act countercyclically but they have the ability to be instruments of public policy. SFIs, specifically development banks, are essential to promote peripheral countries’ catching up since they can operate as part ofthe State toolkit. To do so, they must act in line with other government policies—fiscal, monetary, foreign exchange, and industrial. Credit policy through development banks can be seen as a permanent device for man- aging aggregate demand.

2013

The paper considers the experience of the European Investment Bank and addresses policy lessons for developing countries as they seek finance for development. The paper argues that the key lesson for developing countries is that the traditional role of a development bank in closing market gaps in long-term, low-cost and stable infrastructure lending and in anticyclical financing remains relevant for developing countries but needs to be directed towards new goals. The paper also proposes that an optimal structure is a regionally owned development bank, as this would allow critical advantages of regional ownership, control and responsiveness.

SSRN Electronic Journal, 2000

This paper surveys the theoretical and empirical literature on the role of stateowned banks and also presents some new results and a robustness analysis. The paper shows that state-owned banks located in developing countries have fiscal costs because they are characterized by lower returns than comparable privately owned banks (on the other hand, there is no evidence that state-owned banks located in industrial countries are less profitable than their private counterparts). We then point out that this evidence cannot be used as an argument against the existence of state-owned banks, as this low profitability might stem from stateowned banks' activity on projects characterized by low private sector investment and high social return. While we find no evidence that the presence of stateowned banks promotes economic growth or financial development, we also find that the evidence that state-owned banks lead to lower growth and financial development is not as strong as previously thought.

2006

SSRN Electronic Journal, 2012

Defendants of development banks emphasize their role in reducing capital constraints and fostering productive investment; detractors point out that they may benefit politically connected capitalists or bail out inefficient firms. We study the effect of loans and equity investments of the Brazilian National Development Bank (BNDES) and find that they do not have any consistent effect on firm-level performance and investment, except for a reduction in financial expenditures due to the subsidies accompanying loans. However, BNDES does not systematically lend to underperforming firms. Our results indicate that BNDES subsidizes firms that could fund their projects with other sources of capital.

THE RELATION BETWEEN THE INTER-national banking industry and the develop-ing world is changing, with implications for the growth and financial health of both sides. Sig-nificant transformation in the structure of the in-dustry, coupled with rapid economic growth and financial liberalization in the developing world, has created a new locus of mutual interest and new dynamics of engagement extending well beyond the traditional realm of provision of trade credit and financing sovereigns in distress. With over 2,027 local offices established in 127 developing countries, the international banking industry now has the operating infrastructure and technology platforms to book overseas transactions from a large network of local agencies, subsidiaries, and branches located in developing countries. Aided by growing cross-border lending activity, interna-tional banks play an increasingly important—in some countries, even dominant—role in the financ-ing structure and growth prospects of develop...

2010

Abstract: In this paper we investigate how country shareholding arrangements affect the lending of multilateral development banks (MDBs) under different economic conditions and over time. To do so, we consider three different “types” of MDBs—one dominated by non-...