Bankers, investors from BRICS, G20 to discuss global finance in Russia
July 3, 2015, 7:16 am

The Bank of Russia issues silver commemorative coins for 7th BRICS Summit in Russia [Image: brics2015.ru]

The Russian city of Ufa will host the BRICS and SCO Financial Forum where participants, including the new BRICS Bank President Kundapur Vaman Kamath, will discuss “the role of financial institutions in promoting the development of regions, supporting sustainable growth, innovation and social stability, and other important issues in global finance”, said an official statement.

The financial meet, to be held a day after the $100 billion BRICS Bank officially commences business, is being organised by Russian Vnesheconombank, which chairs the BRICS and SCO interbank associations.

The BRICS Bank will also offer loans to other middle- and low-income countries.

Membership of the BRICS Bank will be open to all members of the United Nations, subject to agreement from the bank’s board of governors, China’s Vice Finance Minister Shi Yaobin said in May.

“The establishment of the BRICS bank is a landmark event in financial cooperation, which will promote the BRICS countries and other emerging markets, and infrastructure construction and sustainable development in developing countries,” said Yaobin.

Apart from the new BRICS Bank head, those attending the financial meet next week in Russia are SCO Secretary-General Dmitry Mezentsev, Vnesheconombank Chairman Vladimir Dmitriyev, President of VTB Bank Andrei Kostin, President of the China Development Bank Zheng Zhijie, President of the Brazilian Development Bank Luciano Coutinho.

Many countries, including Greece, have stated in recent weeks that they are keen to join the new BRICS development Bank, NDB.

In a new report on the Greece crisis, the IMF has argued on Thursday that a new bailout package for Greece by the EU must include debt relief.

“At a minimum, the maturities of existing European loans will need to be extended significantly while new European financing to meet financing needs over the coming years will need to be provided on similar concessional terms. But if the package of reforms under consideration is weakened further—in particular, through a further lowering of primary surplus targets and even weaker structural reforms—haircuts on debt will become necessary,” said the IMF report.

The BRICS New Development Bank will be launched at the first session of its Board of Governors in Moscow on 7 July.

The New Development Bank will provide a financing alternative to the World Bank, where the five large emerging markets have sought more clout.

BRICS leaders also announced the establishment of the BRICS Contingent Reserve Arrangement, a 100-billion-dollar fund from which the BRICS member countries will be allowed to draw funds when going through a crisis.

The bank is set to be headquartered in Shanghai.

The group’s growth rate is still above that of the global average and its economic and political weight is increasing, evident from the decision of several European countries to join the China-led Asian Infrastructure Investment Bank.

TBP