• The Global Transparency Resource
• Importance of Transparency
• IFI's Introduced
  • AfDB - African Development Bank
  • ADB - Asian Development Bank
  • BIS - Bank for International Settlements
  • BSTDB - Black Sea Trade and Development Bank
  • CDB - Caribbean Development Bank
  • CEB - Council of Europe Development Bank
  • EBRD - European Bank for Reconstruction and Development
  • ECB - European Central Bank
  • EIB - European Investment Bank
  • IADB - Inter-American Development Bank
  • IFC - International Finance Corporation
  • IMF - International Monetary Fund
  • IsDB - Islamic Development Bank
  • OECD - Organisation for Economic Co-operation and Development
  • WB - World Bank
  • WTO - World Trade Organisation

EBRD European Bank for Reconstruction and Development (London, United Kingdom)

The European Bank for Reconstruction and Development was created after the fall of the Soviet Union in order to help the former communist countries to establish private sectors. In order to do this they primarily offer loans to businesses in the countries that they are trying to help. In most cases they do not grant loans to the government since the goal is to get the government out of the economy of the country.

There is an important difference between the way that the European Bank for Reconstruction and development works and the way that most other development banks work and that is in who they lend to. Since the goal of the bank is to help the formerly communist countries of Europe in switching to capitalist markets they rarely loan money to the governments of member nations. Instead they normally lend money to private companies that need investment to get started or to grow. Normally the bank will not put up the whole amount of the money required but will instead work with investment partners.

There are situations in which it may be necessary for the European Bank for Reconstruction and Development to lend money to government owned businesses. In this case it is usually done to help prepare them to be taken private. In many cases the businesses that were owned by the state were totally unprepared to compete in the capitalist markets and needed a major overhaul before they could be taken private. In this case the bank would lend them the required money in order to make the necessary changes to the way that they operate.

One of the goals of the European Bank for Reconstruction and Development is to get more private investment in the countries that they are trying to help. Obviously this is not going to happen if the bank is providing most of the funding for the projects. Therefore the bank normally only invests when there are partners for it to work with. In general they will not the majority investor but will require their partner to put up the majority of the money. This has been fairly successful at getting investors to put their money into the formerly communist countries.

One of the other major goals of the bank is to get the formerly communist nations to the point where they no longer need the services of the bank; in this respect they have been less successful. Members of the bank are divided into the countries that receive the loans and those that fund them. All of the former communist countries started out in the category that received the loans. The goal was that they would graduate to the point where they were part of the group that funds the loans. After twenty years in operation only the Czech Republic has actually graduated to the funding group.