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AmericasJune 3 2009

Winners and Losers in LATAM

Nick Rischbieth, president of the Central American Bank for Economic IntegrationSome of the multilateral development banks in the Latin Americas region are proving stellar sources of funding at this time of crisis, although others are lagging behind with depleted reserves. Writer Jane Monahan
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Winners and Losers in LATAM

Multilateral development banks (MDBs) are in a stronger position than others to respond to the crisis. Leading the group, the World Bank successfully completed a $42bn fund raising among its 185 member countries in 2007; and the Corporación Andina de Fomento (CAF) - whose full members, the governments of Bolivia, Colombia, Ecuador, Peru and Venezuela, have 87% of the bank's shares - successfully doubled its authorised capital to $10bn in 2007. On the other hand, the Caribbean Development Bank (CDB), the Central American Bank for Economic Integration (CABEI) and the Inter-American Development Bank (IADB) are all examining the possibility of a capital increase.

Nick Rischbieth, president of the CABEI, says he would like to increase its capital by 150% to $5bn. But, he adds, because it is difficult, in the midst of a global downturn, to raise funds from the bank's permanent shareholders (Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica) and even from the bank's non-regional members (which include Argentina, Mexico and Colombia), he wants to find new shareholders. "There are a number of countries that have signalled an interest in joining the bank. Brazil, I can tell you, is one of them. [South] Korea is another," says Mr Rischbieth.

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