The Multilateral Banking System and Canada's Role. By Jean Serge Quesnel CE

Transcription

1 The Multilateral Banking System and Canada's Role By Jean Serge Quesnel CE

2 Purpose of the presentation To present: the role the international financial institutions; what makes the Multilateral Development Banks efficient; and Canada's role in international financial organisations.

3 What are the main sources of resources for international development?

4 Main Resources for Development Direct Funders Financial Institutions Banks & Funds Capitalists, Multinationals, State entities (Laundering) Black Market Informal Sector Where most of the people in the world earn their living

5 International Financial Institutions

6 Multilateral Cooperation Country Country Country Country Country

7 IFIs Governments International Monetary Fund Multilateral Development Banks Specialised Financial Agencies Global Funds

8 International Monetary Fund

9 IMF in brief IMF has 188 member states. IMF's fundamental mission is to help ensure stability in the international system and to reduce poverty. As of July the Assets of the IMF were: SDR 307 billion (equivalent to US$ 453 billion)

10 IMF Mission IMF accomplishes its mandate in three ways by: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to members on how to upgrade institutions, and design appropriate macroeconomic, financial, and structural policies.

11 IMF Lending IMF is not an aid agency or a development bank. It lends to member states to help them address balance of payment difficulties and restore the conditions for sustainable economic growth. The currencies that IMF provides, on a pro rata of the quota held by the countries, are deposited at their central banks and thus replenish their international reserves. Contrary to loans made by development agencies, the contribution of the FMI does not finance projects or specific activities.

12 Conditionality IMF loans include conditions concerning the application of the economic policy agreed to. The borrowing State is committed to apply the measures agreed to in order to resolve its balance of payment difficulties. IMF loans are made on a temporary basis.

13 Multilateral Development Banks

14 Roles of Multilateral Development Banks Foster development: Ensuring sound investments Acceding to private capital Enable less developed countries to have access to financial resources, normally beyond their reach Provide capital at the lowest interest rate available on international financial markets. Provides state-of-the-art development expertise to the member countries

15 MDB Types of investments Project funding (major infrastructures and social services) Programme funding (Sector or thematic) Institutional strengthening Policy improvement lending

16 MDB Governance Structure Board of Governors (Ministers of Finance Governors of Central Banks) Executive Board Executive Directors representing constituencies of member states President and staff

17 Constitution of the Capital of the Banks 1. Shares are bought by member states (each share represents one vote) 2. Paid-in for the acquisition of each share is 4% 3. Callable for each share is 96%. 4. This means that member states owning the shares enable the bank to sell bonds on the international financial markets, benefiting from their guarantee.

18 Why a lowest interest rate Sound Management High management expertise Transparent oversight Strong Audit & Evaluation Robust investment portfolio Sound Mgt Triple A Strong Guarantee Sound financial management

19 Why a lowest interest rate Triple AAA rating Robust capital base Preferred creditor status (First banks to be paid by debtors) Loans ceiling limited to amount of shares owned by nonborrowers members Callable is guaranteed by all member states Strong support from members Sound Mgt Triple A Strong Guarantee

20 Multilateral Banks - Assets (US$) Global IBRD IDA IFC MIGA 283 billion 145 billion 12 billion 749 million Regional EIB 641 billion AsDB 163 billion IADB 129 billion EBRD 63 billion AfDB 46 billion IsDB 30 billion Source: MDB annual reports

21 Canadian Contribution Total Capital Canadian Exposure World Bank Group 441 billion US$ 12,8 billion US$ 2.9 % Asian Development Bank 163 billion US$ 8,6 billion US$ 5,3 % Inter-American Development Bank 129 billion US$ 5.2 Billion US$ 4 % African Development Bank 99 billion US$ 276 million US$ 3,8% Caribbean Development Bank 1,5 billion US$ 157 million US$ 10.4%

22 Top Private Banks in the World Rank Bank Country Total Assets US$ trillions Date 1 Industrial & Commercial Bank China 3, HSBC Holdings UK 2, BNP Paribas France 2, Mitsubishi UFJ Financial Group Japan 2, Deutsche Bank Germany 2, Bank of America US 2, Banco Santander Spain 1, UniCredit S.p.a Italy 1, ISB AG Switzerland Toronto-Dominion Bank Canada 811 billion Royal Bank of Canada Canada 810 billion Source: Website Banks around the World, 2014

23 Specialised Agencies

24 Specialised Financial Agencies International Finance Corporation Multilateral Investment Guarantee Agency Int l Centre for Settlement of Investment Disputes Promote Foreign Direct Investments Provides Investment Guarantees Provides information on member countries Provides technical assistance

25 Global Funds

26 Global Funds GEF Global Environment Fund (US$57B) UNICEF Children Fund (US$3.7B) UNFIP International Partnerships (US$1B) UNFPA Population Fund (US$470M) UNTFHS Human Security (US$350M) UNDEF Democracy Fund (US$130M) UNCDF Capital Development (US$30M)

27 UNTFHS

28 Questions?

29 End