The Chinese-initiated New Development Bank (aka “BRICS Bank”) is reportedly facing a severe liquidity crisis as Wall Street has backed away from supporting a bank that’s 20% owned by Russia, according to a report in the Wall Street Journal.
That’s made it very difficult and extremely expensive for the bank to raise money to fund its lending operations, prompting a near halt to new financing initiatives, said the report.
“The bank should be concerned about its inability to access capital markets,” said Luciana Acioly, senior researcher at the Institute for Applied Economic Research in Brazil. “It’s not a problem that can be immediately solved.”
In a statement, the New Development Bank said it believes there is “a considerable interest in bonds issued” by the bank and said its sources of liquidity and loan origination pipeline remain strong.
