Leaders of the BRICS emerging market nations launch a $100 billion development bank and a currency reserve pool in their first concrete step towards reshaping the Western-dominated international financial system. Ciara Sutton reports.
They account for almost half the world's population. And now leaders of the emerging BRICS nations have signed a deal to launch their own development bank. It's aimed at funding infrastructure projects in developing nations. Brazilian President Dilma Rousseff outlined the plan at a summit in Brazil. (SOUNDBITE) (Portuguese) BRAZILIAN PRESIDENT DILMA ROUSSEFF, SAYING: "The new BRICS development bank should have an initial authorized capital of $100 billion. An initial subscribed capital of $50 billion equally distributed between its founding members, the five BRICS countries. The first leader of the board of governors will be from Russia. The first leader of the board of directors will be from Brazil. The first bank president will be from India. The first regional office will be in South Africa. And the bank's headquarters will be in Shanghai." The five nations also agreed to create a $100 billion currency reserves pool to help countries prevent short-term liquidity pressures. It's the first major achievement of the BRICS since they got together five years ago - seen as a step they want to take towards reshaping the Western-dominated financial system and major institutions like the World Bank and the IMF. Darren Sinden is from Titan Investment. (SOUNDBITE) (English) TRADER AT TITAN INVESTMENT, DARREN SINDEN, SAYING: "We saw something similar last year with the establishment of the South American development bank, and I think it's right that these giants of now and of the future should want to establish their own banking and monetary policy institutions to reflect the needs of their own growing economies." The BRICS took action following an exodus of capital from emerging markets last year, triggered by the scaling back of U.S. monetary stimulus. Russian President Vladimir Putin wants to take the union a step further. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT VLADIMIR PUTIN, SAYING: "We suggest the setting up of an energy association of the BRICS. And we can also create a reserve fuel bank. And this could also consolidate our energy security." Negotiations over the headquarters and first presidency stretched into the eleventh hour due to differences between India and China. Brazil and India also fought China's attempts to get a bigger share in the lender. Stark differences between the BRICS nations have made it difficult for the group to agree on policies. But having finally got there, the bank is scheduled to start lending in 2016.