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Leaders from Brazil, Russia, India, China and South Africa launched a new development bank and reserve fund yesterday, a major step towards reducing their dependence on the existing, western-dominated, multilateral organisations.

The development bank – commonly referred to as the ‘Brics Bank' – has been created for the purpose of "mobilising resources for infrastructure and sustainable development projects" in emerging and developing economies. It has an authorised capital of $100 billion.

The Contingent Reserve Arrangement will, in contrast, be used to provide liquidity to its members when they face "actual or potential short-term balance-of-payments pressures".

The fund is motivated at least in part...

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