The sixth summit of the BRICS, which consists of Brazil, Russia, India, China and South Africa, will be held in Brazil on Tuesday and Wednesday. It is expected that the launch of a development bank, with an initial capital of 50 billion US dollars, will be announced at the summit.

BRICS Development Bank is similar to IMF

The concept of a BRICS Development Bank was proposed in 2012. The UK newspaper "Financial Times" said that the BRICS Development Bank will become the first major multilateral lending institution established since 1991, when the European Bank for Reconstruction and Development (EBRD) was established.

In March 2013, the fifth summit of the BRICS decided to establish the BRICS Development Bank in order to simplify mutual settlement and loan business among the BRIC countries, thereby reducing dependence on the U.S. dollar and the euro.

The BRICS Development Bank has similarities to organizations like the World Bank and International Monetary Fund (IMF).

During a media briefing held on the 7th, Li Baodong, Deputy Foreign Minister of Chinese Foreign Ministry of Foreign Affairs, said the BRICS summit will be "an important opportunity to announce the establishment of the BRICS Development Bank." The BRICS countries share a broad consensus on the establishment of the bank, but there remain different views on some specific technical issues, which are under discussion, according to Li.

50 billion US dollars of start-up capital

According to British media reports, Russian Finance Minister Anton Siluanov has said that the sixth BRICS summit will implement the long-awaited BRICS Development Bank, and that a discussion on whether its headquarters will be located in Shanghai or New Delhi is in process. He said the bank will have 50 billion US dollars of start-up capital which will gradually increase to 100 billion US dollars. The funds are shared equally by the five BRICS countries.

It is understood that the BRICS leaders are also considering setting up a fund called the BRICS Contingency Reserve Arrangements (CRA), which aims to provide assistance to any country falling into economic crisis.

The reserve fund will stand at 100 billion US dollars, of which China will provide 41 billion US dollars, Russia, Brazil and India will each provide 18 billion US dollars, and South Africa will provide the remaining 5 billion US dollars.

The article is edited and translated from《巴西峰会或成立金砖开发银行 中国或注410亿美元》, source: bjnews.com.cn, author: Chu Xinyan