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Source: Inter-American Development Bank

Following the approval of the Board of Directors of the Asian Development Bank (ADB) to join the Exposure Exchange Agreement among Multilateral Development Banks (MDBs), the Inter-American development Bank (IDB) and ADB today entered into a transaction in the amount of $1 billion.

An exposure exchange agreement is a tool that provides capital relief for MDBs by reducing sovereign-guaranteed portfolio concentration. It is a powerful and cost-effective way to improve capital adequacy ratios especially of regional MDBs, whose portfolio diversification options are limited by the number of their borrowing member countries.

“We are pleased to work with the ADB as a valued counterpart for EEA transactions, which contribute to the IDB’s ability to further strengthen its financial standing. The IDB remains committed to the balance sheet optimization agenda promoted by the G20 and will continue to take actions that safeguard its financial strength, especially during economic down-turns such as the one triggered by the current COVID-19 crisis,” said IDB President Mauricio Claver-Carone.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance, and training to public and private sector clients throughout the region.

About the ADB

The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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