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Co-Financing Transactions between Multilateral Institutions and International Banks

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  • Michel Bouchet
  • Amit Ghose

Abstract

The last decade has exemplified a retrenchment of bank lending in developing countries. International banks strive to boost capital ratios, thereby raising equity, reducing their less profitable assets and rebalancing portfolios towards less risky claims. In that context of underfinanced adjustment and growth programmes in the LDCs, international financial institutions (IFIs) have attempted to mobilize additional financing from commercial banks through co-financing and guarantee operations. The World Bank has been at the forefront of such a role since 1983. The B-loan programme, however, has fallen short of reviving private lending in the LDCs. In 1989, the World Bank introduced an enhanced co-financing operation programme (ECO) geared toward creditworthy borrowers. Risk-sharing arrangements with private banks involve the guarantee of late maturities as well as direct participation in bank loans and partial guarantee of bond issues. Despite more flexible guidelines for the World ... La crise de la dette s'est accompagnée d'un redéploiement des activités des banques commerciales en-dehors des pays en développement. Les banques internationales sont soumises à des pressions compétitives et réglementaires pour renforcer leur ratios de capita et de profitabilité. C'est dans ce contexte que s'inscrit le rôle catalytique des organisations multilatérales pour mobiliser des financements additionnels de source privée. La Banque mondiale a développé ses opérations de co-financement depuis 1983 mais elle s'est heurtée à la réticence croissante des banques pour augmenter leur encours sur les pays en développement. En 1989, la Banque mondiale mis en place un programme de co-financement élargi dans un cadre plus flexible. Le partage des risques avec les créanciers privés prend la forme de garanties du paiement final d'un crédit, de garantie partielle d'émissions de titres ainsi que de participation directe dans des prêts où la Banque devient co-créancier aux côtés de banques ...

Suggested Citation

  • Michel Bouchet & Amit Ghose, 1992. "Co-Financing Transactions between Multilateral Institutions and International Banks," OECD Development Centre Working Papers 78, OECD Publishing.
  • Handle: RePEc:oec:devaaa:78-en
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    File URL: http://dx.doi.org/10.1787/728086677321
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. W. Max Corden, 1988. "Debt Relief and Adjustment Incentives," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 628-643, December.
    3. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12 National Bureau of Economic Research, Inc.
    4. Alain Ize & Guillermo Ortiz, 1987. "Fiscal Rigidities, Public Debt, and Capital Flight," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 311-332, June.
    5. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters,in: Developing Country Debt and the World Economy, pages 1-34 National Bureau of Economic Research, Inc.
    6. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3.
    7. Philippe Callier, 1989. "Debt Relief and Adjustment Incentives in a Financially Open Economy: Comment on Corden," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 514-522, June.
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    Cited by:

    1. Riad Dahel, "undated". "Project Financing and Risk Analysis," API-Working Paper Series 9702, Arab Planning Institute - Kuwait, Information Center.

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