Regional Banks — Set 5

Correct Answer: A. 31

• **31** = The Asian Development Bank (ADB) started with this many founding members. • **1966** — The ADB began with its founding members in this year, and its total membership has since grown to 68 countries. • 💡 Wrong-option analysis: 41: This is not the correct number of ADB's founding members; 51: This is not the correct number of ADB's founding members; 61: This is not the correct number of ADB's founding members; current membership is 68.

Correct Answer: C. USA

• **USA** = This country is not a member of the New Development Bank (NDB), which was founded by the BRICS nations. • **Five BRICS nations** — The NDB was originally founded by these countries (Brazil, Russia, India, China, and South Africa). • 💡 Wrong-option analysis: India: It is a founding member of the NDB; Russia: It is a founding member of the NDB; Brazil: It is a founding member of the NDB.

Correct Answer: B. Sharia compliance

• **Sharia compliance** = This term refers to the Islamic Development Bank (IsDB) providing interest-free loans, adhering to Islamic principles. • **Interest (Riba)** — IsDB follows Sharia principles which prohibit the collection of this, using profit-sharing or fee-based models instead. • 💡 Wrong-option analysis: Equity finance: This involves selling ownership stakes, which is different from interest-free loans; Soft loans: These are loans with more generous terms but are not necessarily interest-free due to Sharia principles; Grant aid: This involves funds given without repayment expectation, whereas IsDB loans are repaid.

Correct Answer: B. Honduras

• **Honduras** = The Central American Bank for Economic Integration (CABEI) is headquartered in Tegucigalpa, a city in this country. • **1960** — CABEI was founded in this year to serve as the financial arm for the integration of Central American nations. • 💡 Wrong-option analysis: Panama: It is a Central American country but not where CABEI's headquarters is located; Costa Rica: It is a Central American country but not where CABEI's headquarters is located; Guatemala: It is a Central American country but not where CABEI's headquarters is located.

Correct Answer: A. EIB

• **EIB (European Investment Bank)** = This regional bank is often referred to as the 'World Bank of Europe' due to its large-scale lending for infrastructure and development. • **Largest international public lending institution** — The EIB is known globally by this designation, providing finance for a wide range of projects. • 💡 Wrong-option analysis: EBRD: It is the European Bank for Reconstruction and Development, focusing on transition economies, but not typically called the 'World Bank of Europe'; NIB: It is the Nordic Investment Bank, with a regional focus on Nordic and Baltic countries, and a smaller scope; ECB: It is the European Central Bank, which manages monetary policy for the Eurozone, not a development bank.

Correct Answer: C. Eastern and Southern Africa

• **Eastern and Southern Africa** = The Trade and Development Bank (TDB) primarily serves this region of Africa. • **COMESA** — TDB acts as the financial arm for the Common Market for Eastern and Southern Africa. • 💡 Wrong-option analysis: [West Africa]: This region is primarily served by other regional development banks; [North Africa]: This region is covered by other financial institutions focused on the Maghreb and broader Arab world; [Central Africa]: This region has its own specific development banks.

Correct Answer: B. EIB

• **European Investment Bank (EIB)** = This regional bank was the first to issue 'Green Bonds' to fund climate projects. • **2007** — The EIB pioneered 'Climate Awareness Bonds' (a type of green bond) in this year, setting a precedent for environmentally friendly financing. • 💡 Wrong-option analysis: [ADB]: The Asian Development Bank issues green bonds but was not the first; [World Bank]: While a major issuer of green bonds, the European Investment Bank pioneered this for regional banks; [AfDB]: The African Development Bank also issues green bonds but not as the first.

Correct Answer: C. China

• **China** = This country was the primary architect and promoter of the Asian Infrastructure Investment Bank (AIIB). • **Largest shareholder** — China remains the largest shareholder in AIIB, reflecting its leadership role in establishing the bank. • 💡 Wrong-option analysis: [Japan]: This country did not join the AIIB initially, preferring existing institutions; [South Korea]: While a founding member, South Korea was not the leading country behind AIIB's initiative; [India]: India is a founding member and a significant shareholder, but China led the initiative.

Correct Answer: C. Germany

• **Germany** = This country is a non-regional member of the African Development Bank (AfDB). • **Non-regional members** — These countries from outside Africa provide capital and support to AfDB, aiding its credit rating and market access. • 💡 Wrong-option analysis: [Nigeria]: As an African nation, Nigeria is a regional member and the largest shareholder; [Kenya]: Kenya is also an African nation and thus a regional member; [Egypt]: Egypt is an African nation and a regional member of the AfDB.

Correct Answer: D. Helsinki

• **Helsinki** = This city in Finland is the headquarters of the Nordic Investment Bank (NIB). • **Eight countries** — NIB is owned by this number of countries across the Nordic and Baltic regions. • 💡 Wrong-option analysis: [Oslo]: Oslo is the capital of Norway, a member country, but not where NIB is headquartered; [Stockholm]: Stockholm is the capital of Sweden, another member country, but not NIB's headquarters; [Copenhagen]: Copenhagen is the capital of Denmark, a member country, but not the NIB headquarters.