Some Implications of Multilateral Financing to the Private Sector without Sovereign Guarantee

Elio Londero ()

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: Direct lending by multilateral development banks to the private sector without sovereign guarantee raises two important issues. First, their presence in the financial markets alters the perception of risk, and that difference in perceived risk carries a market value; the question becomes who appropriates it. Second, by advising on policy matters related to activities that they are or may become interested in financing, or in which they have outstanding balances without sovereign guarantee, multilaterals put themselves in a conflict of interest that may affect their performance in informational and conditionality functions.

Keywords: multilateral; development; banks; finance; conditionality; sovereign (search for similar items in EconPapers)
JEL-codes: F3 O1 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009-05
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:08-2009

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