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BRICS to discuss own bank

BRICS to discuss own bank

(22 March 2012 – Global) Brazil, Russia, India, China and South Africa are ready to establish a development bank for investment risk-sharing. At the fourth BRICS summit in New Delhi on 28 March, the organisation of the bank is expected to be among the leading topics.

Proposed by India, the bank will also serve as an instrument for increasing the influence of BRICS in the International Monetary Fund and other multilateral institutions to match BRICS’ growing economic power.

BRICS is an international political organisation of leading emerging economies. As of early this year, the five BRICS countries constitute almost half of the world's population.

Collectively, BRICS has nominal GDP of US$14 trillion (A$13.3 trillion) and some US$4 trillion in combined foreign reserves.

Professor Adams Bodomo of the School of Humanities at the University of Hong Kong who has made extensive studies on BRICS, said Brazil has proposed that developing countries would be willing to contribute money to solve the Eurozone problems in return for more power in the IMF.

The BRICS development bank presents a unique opportunity for indirect investment of central bank foreign reserves inside the group.

A BRICS bank could also issue convertible debt, which could be top-rated and bought by central banks of the BRICS countries. It would give BRICS a vessel for investment risk-sharing.

China will be the biggest beneficiary of the BRICS bank, believes Alexander Appokin, senior expert at the Centre for Macroeconomic Analysis and Forecasting in Moscow.
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