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Scaling Up for Sustainable Development: Benefits and Costs of Expanding and Optimizing Balance Sheet in the Multilateral Development Banks

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  • Waqas Munir
  • Kevin P. Gallagher

Abstract

Multilateral development banks (MDBs) seemingly face a dilemma whereby rating agencies require them to maintain low‐risk profiles; otherwise, they may be at risk of downgrade. Meanwhile, MDBs are faced with the pressure to increase quantum of their lending operations. This paper estimates the lending headroom available to ‘AAA'‐rated MDBs under scenarios that attempt to manage both of these parameters. Our estimates suggest that MDBs can collectively increase their lending between US$598billion and US$1268billion (65–137 per cent) and that for at least four MDBs, the policy option of opting for ‘AA+' may possibly be a viable case. © 2020 John Wiley & Sons, Ltd.

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  • Waqas Munir & Kevin P. Gallagher, 2020. "Scaling Up for Sustainable Development: Benefits and Costs of Expanding and Optimizing Balance Sheet in the Multilateral Development Banks," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(2), pages 222-243, March.
    • Handle: RePEc:wly:jintdv:v:32:y:2020:i:2:p:222-243
    DOI: 10.1002/jid.3453
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    Cited by:

    1. Marina Zucker‐Marques & Kevin P. Gallagher, 2024. "Sustainable future bonds: Boosting multilateral development banks lending and improving the global reserve system: Sustainable future bonds," Global Policy, London School of Economics and Political Science, vol. 15(1), pages 166-182, February.
    2. Jinpei Liu & Mengdi Fang & Feifei Jin & Chengsong Wu & Huayou Chen, 2020. "Multi-Attribute Decision Making Based on Stochastic DEA Cross-Efficiency with Ordinal Variable and Its Application to Evaluation of Banks’ Sustainable Development," Sustainability, MDPI, vol. 12(6), pages 1-15, March.
    3. Fleiss, Pablo, 2021. "Multilateral development banks in Latin America: Recent trends, the response to the pandemic, and the forthcoming role," Studies and Perspectives – ECLAC Office in Washington 46916, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Pejman Peykani & Mostafa Sargolzaei & Mohammad Hashem Botshekan & Camelia Oprean-Stan & Amir Takaloo, 2023. "Optimization of Asset and Liability Management of Banks with Minimum Possible Changes," Mathematics, MDPI, vol. 11(12), pages 1-24, June.

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