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Bolstering sovereign debt sustainability: Integrating EMDE banks in the debt issuance and swap trading activities of MDBs

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Listed:
  • Nick K. Kolev
  • Amil Aneja

    (Independent Consultant)

Abstract

Since 2020, sovereign debt, measured either in nominal terms or as a percentage of economic output, has reached historical peaks. In some emerging market and developing economies (EMDEs), with official development assistance (ODA) decreasing, capital flight and sovereign default represent acute risks. Being countercyclical lenders, multilateral development banks (MDBs) can strengthen sovereign debt sustainability (SDS) by lowering their lending rates to borrowing member countries (BMCs). Through capital market development (CMD) and domestic resource mobilization (DRM), MDBs' lending rates to BMCs can be lowered on market terms and without ODA dependence. This article describes an initiative – Spartacus Derivative Products LP (Spartacus) – that achieves this outcome by integrating EMDE banks in the debt issuance and swap trading activities of triple-A MDBs.

Suggested Citation

  • Nick K. Kolev & Amil Aneja, 2026. "Bolstering sovereign debt sustainability: Integrating EMDE banks in the debt issuance and swap trading activities of MDBs," Development Finance Agenda, Chartered Institute of Development Finance, vol. 11(5), pages 14-15.
    • Handle: RePEc:afj:journ4:v:11:y:2026:i:5:p:14-15
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-defa_v11_n5_a3
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