22 July 2014

The leaders of the five BRICS countries - Brazil, Russia, India, China, and South Africa - signed an Agreement to establish a New Development Bank (NDB).

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.  

Sixth BRICS Summit: Fortaleza Declaration

Other news: 

BRICS Nations to create $1billion development bank 

Emerging economies launch development bank 

An analysis of the possible implications for the aid architecture of such a bank, prior to its official launch 

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