Addressing Prudential Barriers to Private Capital Mobilization for Emerging Markets and … – IIF

Status: Will be live at 09/15/2026 06:50 September 15, 2026 Mobilizing private capital for emerging markets and developing economies remains one of the central challenges in development finance. While multilateral development banks (MDBs) and development finance institutions (DFIs) can play an important role in reducing risk through guarantees, co-financing, political risk coverage, and other structures, existing bank and insurance prudential frameworks do not always fully recognize those risk-mitigation benefits. In a new policy paper prepared on behalf of the EMDE Investor Taskforce, the IIF sets out a targeted agenda to address these barriers without weakening prudential standards or encouraging greater risk-taking. Instead, the recommendations are designed to help ensure that capital requirements more accurately reflect the actual risk characteristics of MDB- and DFI-supported transactions. The paper identifies opportunities across both banking and insurance frameworks, including improved data collection on A/B loans and infrastructure finance; greater clarity around the regulatory treatment of political risk insurance and DFIs; more effective use of MDB loss data in insurer models; better treatment of MDB-linked instruments under solvency regimes; and clearer rules for securitized and synthetic risk-transfer structures. Importantly, the paper also sets out a practical near-term agenda for the UK’s 2027 G20 Presidency. Many
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