| Inter-american Development Bank |
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The IDB has four official languages: English, French, Portuguese, and Spanish. Its official names in the other three languages are as follows:
In all three of the other languages, the Bank uses the acronym "BID". MEMBER STATES The Bank is owned by 47 sovereign states, which are its shareholders and members. Of these states 26 are borrowers, and 21 do not borrow from the Bank. HOW THE IDB WORKS The IDB makes loans to the governments of its borrowing member countries at standard commercial rates of interest, and has ''preferred creditor'' status, meaning that borrowers will repay loans to the IDB before repaying other obligations to other lenders such as commercial banks. The funds that the IDB lends are raised by selling Bonds to institutional investors at standard commercial rates of interest. The bonds are backed by (a) the sum of the capital subscriptions actually paid in by the Bank's 47 member countries, plus (b) the sum of the callable capital subscriptions pledged by the Bank's 21 non-borrowing member countries. Together these constitute tha Bank's ''ordinary capital'', some US$101bn. Of this money 4.3 percent is paid in, while the remaining 95.7 percent is callable. The callable capital pledged by the 21 non-borrowing members, which include the world's wealthiest developed countries, therefore functions as a guarantee for the bonds that the IDB sells. This arrangement ensures that the IDB maintains a triple-A Credit Rating , and as a result can make loans to its borrowing member countries at rates of interest similar to those that commercial banks charge their largest corporate borrowers. At the same time, the 21 non-borrowing countries are only putting up guarantees – not actual loans – so their support of the IDB's lending operations has a minimal impact on their national budgets. As in the and the Caribbean combined hold 50.02 percentData as of 2005.. This arrangement is unique in that the developing member countries, as a group, are the majority shareholders. Though this arrangement was first viewed as risky, it is believed by some that strict peer pressure prevents the borrowers from Defaulting , even when under severe economic pressure. However, Argentina did Default In 2001 ; this was publicly announced in 2002. NOTES SEE ALSO
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