A blog from Save the Children.
The announcement was made on 15 July at the 6th BRICS Summit in Brazil. The BRICS have been negotiating the creation of this new financing institution for more than a year now. The main purpose of the new bank will be to 'mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies'. The New Development Bank has an initial authorized capital of US$100 billion and the initial subscribed capital will be of US$ 50 billion, equally shared among founding members. The bank will have its headquarters in Shanghai, China. Its first President will be from India, while the first chair of the Board of Governors will be from Russia and the first chair of the Board of Directors from Brazil. The BRICS Leaders also agreed to establish a 'Contingency Reserve Arrangement', as an instrument to facilitate provision of liquidity in times of need. The potential impact on the aid architecture of this new bank remains to be seen.