Brics creates Shanghai-based bank

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iol news pic Brics 2 GCIS Photo Studio Russian President Vladimir Putin, India Prime Minister Narendra Modi, Brazilian President Dilma Rousseff, Chinese President Xi Jinping and President Jacob Zuma at the 6th BRICS Summit held at Centro de Eventos do Ceara' in Fortaleza, Brazil. Pic: Elmond Jiyane, GCIS Photo Studio.

Fortaleza, Brazil - The Brics group of emerging powers launched a $50 billion development bank Tuesday to be based in Shanghai and a $100 billion crisis contingency fund, according to a joint declaration.

The New Development Bank's first president will be from India while the board's chairman will be Brazilian, according to the declaration released at a summit in Fortaleza, Brazil.

The bank will have an initial subscribed capital of $50 billion followed by an authorized capital of $100 billion, equally shared among Brazil, Russia, China, India and South Africa.

The Contingency Reserve Arrangement will have an initial size of $100 billion and will help countries avoid “short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.”

The bank and fund are seen as counterweights to the Western-dominated World Bank and International Monetary Fund, which BRICS nations say need more reform to give emerging nations more voting rights.

Sapa-AFP



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