Formerly referred to as the BRICS Bank, the New Development Bank (NDB) was founded just over three years ago. The BRICS has been a receiving a lot of criticism over the years – it was dismissed a label as a marketing acronym.
With the current cloud hanging over emerging markets the bank is surprisingly making headway. South Africa slipped into an unexpected recession earlier in the month, Brazil and Russia’s economies are still recovering. “A sharp fall in the rupee reflects jitters about India” – the Economist. China is currently in a trade war with the US.
The bank aimed at reshaping world development finance, has been constantly compared to the Asian Infrastructure Investment Bank (AIIB) which was launched after the NDB. The BRICS Bank was viewed to be of lesser influence and effectiveness.
The Economist. Com at a closer look inspect both financers and noticed the following; both banks are busy as each other. The New Development Bank has approved $5.7bn in loans and the AIIB has approved $5.3bn. Both the NDB and the AIIB are adding to their ranks daily. Both have international credit rating, three rating agencies rated AIIB triple -A scores last year. The NDB was rated S&P and Fitch AA+ in August.
The BRICS bank is gaining traction and has been admired by economists. “Why do we need another World Bank? The AIIB looks a lot like what’s out there. The NDB is looking more innovative” says Gregory Chin, economic diplomacy specialist at the University of Canada. Chin added by saying that the BRICS walls are shaky, but the banks looks more solid.
Source: The Economist