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BSTDB Suggests How Multilateral Development Banks May Respond Better to the Pandemic

News | 01-Jul-2020

  • The Black Sea Trade and Development Bank (BSTDB) has analyzed the impact of the COVID-19 Pandemic Crisis on the Black Sea Region, and the policy responses of its Member Countries and those of Multilateral Development Banks (MDBs)
  • Many MDBs, instead of increasing their activities, have adapted priorities and refocused lending to safeguard their creditworthiness, as they cannot count on additional capital injections from fiscally constrained member states, and, in contrast to commercial banks, lack access to liquidity provided by central banks.  Nevertheless, MDBs have special development mandates and a better track record of focused support for the real economy;
  • In the absence of new capital, policymakers should enhance the potential of MDBs to contribute to the post-pandemic recovery by considering measures such as enabling the mass securitization of MDB assets and providing access to extraordinary liquidity.

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