Development Banks: a Key Role in the Ecologic Transition and in the Pandemic Crisis

Development banks have shown themselves to be key players in the face of the pandemic crisis. They were also among the first financial actors to transform themselves in recent years to meet the needs of ecological reconstruction. This capacity to adapt and innovate in the face of changing development models is rooted in a long history that goes well beyond the rhetorical framework of market imperfections. It is also based on the existing dynamics of the global financial architecture, while at the same time helping to shape them. Like the current proposal for a Liquidity and Sustainability Facility, development banks could thus redirect private investment flows by subsidizing the perceived or real risks of the ecological and social projects to be financed. This strategy carries the risk of accentuating the pro-cyclical bias of such financing without necessarily guaranteeing its ecological character. Like the green deals projects, they could also directly support economic and social sectors of general interest by responding to a locally and democratically formulated demand. Ultimately, the future forms of intervention by development banks are shaped by the immediate responses to the pandemic crisis.