Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252343 
Year of Publication: 
2021
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1292
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
Long-term development finance provided by Multilateral Development Banks (MDBs) is key to advancing the United Nations 2015 Sustainable Development Goals. However, MDBs are constrained in their lending by the availability of capital. This paper argues that Risk Transfer, as a complement to equity injections, could permit higher MDB lending by attracting a broader class of investors. We describe selected examples of actual Risk Transfer transactions and provide estimates of the potential expansion in lending these techniques could yield. But we also identify obstacles that limit investors willingness and ability to participate in these transactions. Therefore, we recommend an agenda for international policymakers to open the way for the wider use of Risk Transfer. Still, we recognize this will be a gradual process which cannot substitute for MDB expansion through additional ordinary capital resources.
Subjects: 
Risk Transfer
International Financial Architecture
G20
Multilateral Development Banks
Securitization
Rating Agencies
Preferred Creditor Treatment
Development
JEL: 
F53
O16
G15
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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