The Rationale And Need Of New Financial Institutions: A China-Led Brics Initiative

Surajit Ghosal


     With slow growth in the North, the conditionality and limits of existing financial institutions, it opens more innovative ways to increase the trade volume, for financing infrastructure deficits and better utilize and channels the world’s savings surplus. China-led new financial institutions, New Development Bank, Contingent Reserve Arrangement, Asian Infrastructure and Investment Bank and the New Silk Road Fund have been established recently. With an eye to the vast investment requirement in the developing countries expecting more than one trillion dollar per year for infrastructure itself, the size of the new institutions envisage financing capacity so far remains quite insignificant. But the steps towards this innovation may gradually build up in size could play a significant role in the international financial market and there would be success stories of the new financial institutions. For India also it’s a great opportunity for financial supports towards infrastructural and other development aspects by maintaining a good trade relationship with China.



Capital Flow, Infrastructure, International Financial Institutions, Investment, Sustainable development.

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