International financial organizations take center stage amid economic uncertainty
In a webinar focused on strategies to tackle the current global pandemic and economic crisis, Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) are playing a significant role in the discussion. The topic of the webinar is commercial lending and private sector investment into emerging markets during economic crises.
Senior representatives from leading International Financial Institutions (IFIs) are participating, including Koffi Klousseh, Director of Project Development; Africa50, Georgina Baker, Vice President, Latin America and the Caribbean, and Europe and Central Asia; International Finance Corporation, Luke J. Lindberg, Senior Vice President of External Engagement; The Export-Import Bank of the United States, Tony Bakels, Director of Credit, Legal and Special Operations; FMO, Tracey Webb, Vice President Structured Finance and Insurance; US International Development Finance Corporation, and Hristo Stoykov, Head of Growth Capital and Innovation Finance; European Investment Bank. The webinar is moderated by unspecified individuals.
DFIs primarily help by mobilizing private finance through risk-sharing mechanisms, grants, and forgivable loans, especially when traditional sources of finance are constrained during crises. During the pandemic, DFIs contributed by offering local currency financing solutions and liquidity platforms designed to reduce dependency on volatile foreign exchange markets, thereby enhancing financial resilience in emerging markets. Initiatives like FX EDGE and Delta illustrate innovative platforms through which DFIs increase local currency lending and risk management capabilities.
ECAs complement this by mitigating risks associated with international trade and investment in emerging markets, enabling continued export activity and foreign direct investment when private sector confidence is low. Their role is critical in providing guarantees and insurance against political and commercial risks, which helps maintain trade flows and economic activity during times of global uncertainty.
In addition to direct financing, these institutions support strengthening financial sectors in emerging markets. They contribute to debt sustainability and crisis prevention by encouraging sound financial policies, improving local banking systems, and broadening financial inclusion. This reduces the need for excessive external borrowing and enhances resilience to external shocks. Stronger domestic financial institutions foster inclusive development, helping marginalized communities access credit and sustain local businesses during shocks like the pandemic.
Moreover, DFIs and ECAs aid emerging markets amid fiscal constraints due to declining foreign aid by providing innovative financing alternatives and facilitating cooperation among multiple stakeholders—including governments, global financial institutions, and private investors—to fill critical financing gaps.
Overall, DFIs and ECAs act as stabilizers and catalysts by providing countercyclical financing and risk mitigation tools, promoting local currency lending to reduce exchange rate risks, supporting institutional capacity building and financial inclusion, facilitating trade and investment through risk guarantees, and collaborating with MDBs and national banks to scale up investment during crises. These multifaceted roles enable emerging markets to better withstand economic shocks like the global pandemic and foster sustainable recovery pathways.
The webinar aims to provide insights into the role of DFIs and ECAs in supporting emerging markets during crises and discuss what these institutions are doing to help emerging markets recover from the crisis. The webinar is available for viewing now, and organizers have applied for continuing legal education credits in various states, including Texas, California, Missouri and Illinois, and New York.
[1] References omitted for brevity.
Business leaders and financial institutions are collaborating to explore strategies for investing in emerging markets during economic crises. Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) are playing a significant role in this discussion, offering financing solutions that reduce dependency on volatile foreign exchange markets and increase local currency lending, ultimately enhancing financial resilience. Furthermore, these institutions are working together to provide risk mitigation tools, support financial sector development, facilitate trade, and collaborate with various stakeholders to fill critical financing gaps, thereby enabling emerging markets to withstand economic shocks like the global pandemic and foster sustainable recovery.
