Recent Posts
A Dive into MDB Policy-Based Guarantees: Relevant but in Need of Reform?
July 20, 2022Policy-based guarantees (PBGs) have long been a multilateral development bank (MDB) instrument in search of a purpose. PBGs—a credit enhancement for sovereign market borrowing—have been around for decades but their uptake has been limited. In most instances, they have proven remarkably effective in helping to reduce governments’ external financing costs and mobilize large volumes of private capital. As we enter a period of heightened global economic volatility, PBGs could become a particularly useful instrument for emerging and frontier markets seeking to maintain access at affordable rates. They could also be [...]
How We Can Put SDRs to Work in the Fight Against Climate Change—The Multilateral Development Bank Option
April 25, 2022The world is in economic crisis and climate change is threatening our very existence. Many countries are in desperate need of financing to confront acute needs for energy and food, while at the same time facing huge investment costs to adapt to climate change and retool economies to low-carbon production. In such times it should be unthinkable to leave any assets unused. But that is just what is happening now: Special Drawing Rights (SDRs) are sitting idle in many countries’ central banks. With a political push and some technical innovation, [...]