Economics

Aug 20, 2026 Erik Berglöf

Even as multilateralism faces an existential threat, multilateral development banks are not only surviving but thriving. Thanks to MDBs’ ability to borrow at costs close to that of the US Treasury, they have created a new class of de facto risk-free assets that could help underpin the global financial system.

BEIJING—Despite all the geopolitical chaos, one can still find some comfort in today’s capital markets. The walls of the multilateral order may be cracking, but in the quiet corners of global finance, a remarkable counternarrative is unfolding: multilateral development banks are not only surviving but thriving. Thanks to MDBs’ ability to borrow at costs close to that of the US Treasury, they have created a new class of de facto risk-free assets that could help underpin the global financial system.