Leading development banks wary of new EM entrants

Tokyo

IN AN extraordinary show of solidarity and defensiveness, the world's leading multilateral development banks and the International Monetary Fund (IMF) have warned of a possible dilution in the "quality of spending", with the entry of two new development banks - the China-led Asian Infrastructure Investment Bank (AIIB) and the New Development Bank - into the field.

The more established development banks that have closed ranks note that the infrastructure financing gap in emerging and developing economies is "broadly estimated at over US$1 trillion per annum", at a time when governments are ramping up infrastructure building as a way to boost economic growth.