The world’s largest multilateral development bank is holding roughly €200 billion ($232 billion) in unused lending capacity, according to a new analysis.
The findings by Stephen Paduano, a postdoctoral research fellow at Oxford University and former U.S. Treasury official, suggest that the European Investment Bank — which is fully owned by the European Union’s member states — could dramatically scale up its operations both within and beyond Europe without losing its AAA credit rating, but remains constrained by internal conservatism and rigid guarantee policies. A high credit rating allows banks to borrow at very low interest rates and therefore lend below market rates as well.
The analysis comes amid global efforts to push MDBs to stretch their balance sheets. Beyond the EIB, the research shows that many other MDBs hold vast reserves that they could safely deploy.
About the author
Jesse Chase-Lubitz
Jesse Chase-Lubitz covers climate change and multilateral development banks for Devex. She previously worked at Nature Magazine, where she received a Pulitzer grant for an investigation into land reclamation. She has written for outlets such as Al Jazeera, Bloomberg, the Organized Crime and Corruption Reporting Project, and The Japan Times, among others. Jesse holds a master’s degree in Environmental Policy and Regulation from the London School of Economics.
