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Turbulent Times: The Influence of Global Financial Organizations

Gather around to listen to top officials from prominent International Financial Institutions discuss their strategies for addressing the ongoing economic and financial predicament.

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Turbulent Periods: International Financial Bodies in the Spotlight
Turbulent Periods: International Financial Bodies in the Spotlight

Turbulent Times: The Influence of Global Financial Organizations

During times of economic and financial crises, Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) play crucial roles in stabilizing economies, enabling investment, and supporting development.

A webinar, focusing on commercial lending and private sector investment into emerging markets during economic crises, is currently underway. Senior representatives of leading International Financial Institutions (IFIs) are participating, including Koffi Klousseh, the Director of Project Development at Africa50, Georgina Baker, the Vice President of Latin America and the Caribbean, and Europe and Central Asia at International Finance Corporation, and Hristo Stoykov, the Head of Growth Capital and Innovation Finance at European Investment Bank.

The topic of the webinar highlights the critical roles DFIs and ECAs play during crises. These institutions are crowding in private finance by providing technical assistance and mitigating risks to attract private investors to emerging markets where commercial financing is limited. They are offering local currency financing and risk management tools to reduce foreign exchange vulnerabilities that commonly worsen during crises.

Furthermore, DFIs and ECAs are mobilizing multistakeholder coalitions involving multilateral development banks, national development banks, and private sector actors to scale up financing and implement more resilient and long-term development solutions. They are supporting conflict sensitivity studies and peacebuilding efforts in fragile and frontier markets to guide responsible investment and avoid exacerbating instability during crises.

In times of global pandemic and economic meltdown, DFIs and ECAs are adapting eligibility and operational flexibility to respond proactively to fast-changing economic situations. They are playing an important role in logistical and market expansions, underpinning economic recovery and growth post-crisis.

Strategies employed by DFIs and ECAs during crises include developing innovative financial instruments and streamlined approaches for debt swaps, liquidity provision, and risk mitigation. They are advocating for greater collaboration among MDBs, DFIs, national banks, and the private sector to pool resources and expertise in delivering systemic, sustainable development financing.

The webinar underscores that DFIs and ECAs act as pivotal financial actors during economic and financial crises by leveraging innovative financing tools, fostering multilateral partnerships, and maintaining operational agility. Their combined efforts aim to stabilize economies, attract private capital, and promote resilient development outcomes in challenging environments.

Continuing education credit approval has been applied for in New York, California, Texas, Missouri, and Illinois for those interested in learning more about the strategies and roles of DFIs and ECAs during economic crises.

Ken Hansen, Partner, and Sarah Devine, Partner, are part of our website US LLP. Tony Bakels is the Director of Credit, Legal and Special Operations at FMO. Luke J. Lindberg is the Senior Vice President of External Engagement at The Export-Import Bank of the United States. Tracey Webb is the Vice President of Structured Finance and Insurance at US International Development Finance Corporation.

[1] https://www.ifc.org/wps/wcm/connect/b4e056da-7c4b-482e-b3ef-c05ba9c2066d/IFC+and+European+Investment+Bank+Launch+New+Innovative+Financing+Instrument+to+Support+SMEs+in+Africa+and+Middle+East.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE.Z18_1QK41482LRY1KSP1EJ4DBJ25121-15822-QyJHf3 [2] https://www.ifc.org/wps/wcm/connect/b4e056da-7c4b-482e-b3ef-c05ba9c2066d/IFC+and+European+Investment+Bank+Launch+New+Innovative+Financing+Instrument+to+Support+SMEs+in+Africa+and+Middle+East.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE.Z18_1QK41482LRY1KSP1EJ4DBJ25121-15822-QyJHf3 [3] https://www.ifc.org/wps/wcm/connect/b4e056da-7c4b-482e-b3ef-c05ba9c2066d/IFC+and+European+Investment+Bank+Launch+New+Innovative+Financing+Instrument+to+Support+SMEs+in+Africa+and+Middle+East.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE.Z18_1QK41482LRY1KSP1EJ4DBJ25121-15822-QyJHf3 [4] https://www.eib.org/en/projects/growth-capital-and-innovation-finance [5] https://www.eib.org/en/projects/growth-capital-and-innovation-finance

  1. The webinar emphasizes the essential role of Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) in the business sector, particularly during economic crises, as they help stabilize economies, attract private capital, and promote resilient development outcomes.
  2. In the finance industry, DFIs and ECAs are innovative actors, developing new financial instruments, such as those implemented by IFC and the European Investment Bank, to support Small and Medium Enterprises (SMEs) in emerging markets.
  3. To foster growth and sustainability in the banking-and-insurance and fintech sectors, DFIs and ECAs are partnering with multilateral development banks, national development banks, and private sector actors, leveraging their expertise in providing local currency financing and risk management tools.

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