National development banks are particularly popular for their role in funding infrastructure
) or to aid industrialisation . But they soon found themselves at the centre of ideological battles. Proponents of state intervention saw them as plugging financing gaps. Opponents thought they distorted markets. As the free-market “Washington Consensus” gained ground in the 1980s, many banks shrank or were privatised.
It took a global financial crisis in 2007-08 for the pendulum to swing back—and stop in the middle. “We’ve moved on from the cold war discourse of states v markets,” says Mr Studart. Policymakers now favours for their counter-cyclical role. In 2007-09 their combined loan portfolio increased by 36%, over three times faster than private peers. Their resilience reflects stable funding. Few rely on deposits, and state guarantees allow many to access markets cheaply.
Even more popular is their role in funding infrastructure, which promises productivity gains. Colombia used one to spend billions on a 8,000km road programme. France’s Banque Publique d’Investissement channelled $12bn in equity and debt to 4,000 startups in 2017. The revamped model is winning support from both statist types, who enjoy regaining control over industrial policy, and liberals, who like funding entrepreneurs without pulling fiscal levers. It helps thatform a broad church. A few are huge: China Development Bank manages $2.4trn—half the global total. Some are big fish in small ponds: Bhutan Development Bank runs a quarter of the Himalayan kingdom’s banking system. Half oftarget certain sectors; the rest have wider mandates.
Government funding guarantees are therefore key to their viability. That makes it essential that their operational independence is enshrined in strong governance. But that is not often so. Government appointees dominate boards. Mandates are loosely defined, leaving the allocation of funds vulnerable to influence by officials or private interests. Brazil offers a cautionary tale.in 2011.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Amazon is working with Mexico's government-backed bank on a mobile payments systemAmazon is working with Mexico’s government-backed bank on a mobile payments system.
Read more »
Berlin backs Deutsche Bank merger despite risk of shortfall: sourcesBerlin is so worried about the health of Deutsche Bank that it pushed for a merg...
Read more »
China central bank pledges more policy support as bank lending slidesChina's central bank on Sunday pledged to further support the slowing econo...
Read more »
Euro zone banks jump, Italian yields fall on report ECB discussing new cheap bank loansEuro zone bank shares jumped and Italian government bond yields fell on Wednesday after Bloomberg reported the European Central Bank is holding discussions on the design of new ultra-cheap bank loans.
Read more »
Treasury yields rise amid US-China trade developmentsMarket players are focused on U.S.-China trade developments with mixed messages on the progress of talks between Washington and Beijing .
Read more »
Inglewood votes to limit rent hikes and halt evictions spurred by developmentInglewood adopted a temporary rent cap limiting increases to 5% amid rapidly rising housing costs, but some say it doesn't go far enough.
Read more »
Treasury yields fall amid US-China trade developmentsU.S. government debt prices rose Wednesday as traders monitored U.S.-China trade developments.
Read more »
Dow futures point to a lower open as investors monitor US-China trade developmentsU.S. stock index futures were lower Wednesday morning as market players remain focused on U.S.-China trade developments.
Read more »
Dow futures point to a flat open as investors monitor US-China trade developmentsU.S. stock index futures were marginally higher Tuesday morning with market players still focused on U.S.-China trade developments.
Read more »
MoviePass closes up its Los Angeles office after firing its business development teamFollowing layoffs, MoviePass closes up its Los Angeles office as the company continues to tailspin after being delisted from the Nasdaq.
Read more »