What is a Multilateral Development Bank?

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31 July 2015

Supranational institutions that are set up by sovereign states (their shareholders) are known as Multilateral Development Banks or MDBs for short.

Their areas of responsibility and authority reflect the development aid and cooperation policies that are set up by these states.

By financing projects, generating capital and supporting investment, MDBs have the common task of nurturing economic and social progress in developing countries.

Additionally, MDBs undertake a significant role in the international capital markets by raising the large volume of funds required to finance their loans each year.

Both the PRA and FCA handbook lists the following as MDBs:

• African Development Bank;
• Asian Development Bank;
• Caribbean Development Bank;
• Council of Europe Development Bank;
• European Bank for Reconstruction & Development;
• European Investment Bank;
• European Investment Fund;
• Inter-American Development Bank;
• International Bank for Reconstruction 91 and 91 Development;
• International Finance Corporation;
• International Finance Facility for Immunisation;
• Islamic Development Bank;
• Multilateral Investment Guarantee Agency; and
• Nordic Investment Bank;

And in addition the FCA’s BIPRU rule book considers the following to also be multilateral development bank (for the purposes of the standardised approach to credit risk).

• Inter-American Investment Corporation;
• Black Sea Trade and Development Bank; and
• Central American Bank for Economic Integration