The Bank of the South (or in Spanish, Banco del Sur) is an institution that promises to help Latin American countries help themselves.
Founded late last year, the Bank has just announced it will begin operations with US$10 billion in startup capital. This amount may climb to as much as $20 billion. Each country’s contribution is directly proportionate to the size of its economy. Member states are Venezuela, Ecuador, Bolivia, Argentina, Brazil, Paraguay and Uruguay (see their economy ministers pictured here).
What are the benefits? The new Bank of the South gives countries a new option for how to finance development programs. Priority areas are infrastructure, industry, housing, transportation, and human capacity-building.
Most importantly, the Bank creates an opportunities for cooperation and mutual assistance among countries in the region. Instead of relying on financial institutions like the IMF, which issued loans tied to policy demands, nations can soon borrow on their own terms.