Risk transfer for MDBs: Transferring risk to lend more

William Perraudin, Federico Galizia, Andrew Powell and Timothy Turner
Additional contact information
William Perraudin: Risk Control Limited, UK
Federico Galizia: Washington DC, USA
Andrew Powell: Williams College, USA
Timothy Turner: The Trade & Development Bank, Kenya

Journal of Risk Management in Financial Institutions, 2025, vol. 18, issue 2, 185-196

Abstract: Long-term development finance provided by multilateral development banks (MDBs) is key to advancing the United Nations’ Sustainable Development Goals (UN SDGs). MDBs are, however, constrained by the availability of capital. Risk transfer can shift risk from their balance sheets to expand lending. This paper explains how ground-breaking securitisation transactions have been used by MDBs and argues that, while there are challenges, this technique has significant potential to increase development lending.

Keywords: risk transfer; international financial architecture; G20; multilateral development banks; securitisation; rating agencies; preferred creditor treatment; development (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2025:v:18:i:2:p:185-196

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