Leverage and Multilateral development bank: Difference between pages

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1. <br />
(MDB).
Debt divided by Debt plus Equity = D / (D + E).<br />


<b>Example</b><br />
Development banks are national or regional banks established to provide loans or equity capital for productive investment, often accompanied by technical assistance, in developing countries.
If the amounts of debt and equity were equal then leverage under this definition would be calculated as:<br />
1 / (1 + 1) = 50%.<br />


2. <br />
A multilateral development bank is a supranational one, set up by more than one country.
The term 'leverage' is also used in a broader sense to refer to the amount of debt in a firm's financial structure.<br />
Used in this broader sense, 'leverage' means very much the same as 'gearing'. <br />
However, leverage and gearing are normally quantified by different calculations.<br />


3. <br />
To increase the level of gearing in an operational or financial structure.  The intention of leveraging is to improve expected net results.  <br />
A consequence of leveraging is normally to increase financial risk.<br />
Many financial disasters have been a consequence of leveraging up excessively in this way in earlier periods.


== See also ==
== See also ==
* [[Debt]]
* [[African Development Bank]] (AfDB)
* [[Deleverage]]
* [[Asian Development Bank]] (ADB)
* [[Gearing]]
* [[Central bank]]
* [[Leverage ratio]]
* [[Development bank]]
 
* [[Development finance institution]]  (DFI)
 
* [[European Bank for Reconstruction and Development]]  (EBRD)
===Other links===
* [[European Investment Bank]]  (EIB)
[http://www.treasurers.org/node/8012 Masterclass: Measuring financial risk, The Treasurer, July 2012]
* [[Inter-American Development Bank]]  (IDB)
* [[International Finance Corporation]]  (IFC)
* [[Islamic Development Bank]]  (ISDB)
* [[Organisation for Economic Co-operation and Development]]
* [[Supranational]]


[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Financial_products_and_markets]]
[[Category:Trade_finance]]

Revision as of 02:37, 15 December 2021

(MDB).

Development banks are national or regional banks established to provide loans or equity capital for productive investment, often accompanied by technical assistance, in developing countries.

A multilateral development bank is a supranational one, set up by more than one country.


See also

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