main navigation menu
World Bank building

MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

Young woman bending down to tending to her outside chores

Explore different types of political risk insurance guarantees provided to investors and lenders.

Hyundai building

Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Subscribe to Our Monthly Newsletter

RBI Central Bank Mandatory Reserves Coverage

$111.2 million
Project Brief
Not Active

On March 31, 2015 MIGA issued a guarantee of €103.6 million ($111.2 million equivalent) covering equity investments by Raiffeisen Bank International AG (RBI) in its subsidiary in Albania, Raiffeisen sh. a. (Raiffeisen Albania). The coverage is for a period of up to three years against the risk of expropriation of funds.[i]

Vienna-based RBI is a universal banking group that has operated for over 25 years in up to 15 markets with a network of retail banks across Central, Eastern, and Southeastern Europe. RBI’s subsidiary banks abroad are required to maintain reserves at the central banks in their respective jurisdictions, generally based on the volume of customer deposits that these subsidiaries have. This exposure leads to higher risk weights on assets at the consolidated level, resulting in increased capital allocation for country risk exposure. At the consolidated level, the risk weighting determines the amount of equity required to maintain a specified capital adequacy ratio in accordance with Austrian banking law.

MIGA’s guarantee will help RBI obtain relief from the capital adequacy requirements by reducing the risk weighting for the mandatory reserves maintained by RBI’s subsidiary in Albania. This will free up equity tied up for country risk purposes and allow RBI’s subsidiary to extend more credit that will stimulate growth, generate employment, and reduce poverty in the country.

MIGA’s coverage to RBI is consistent with the goals of the crisis response initiative for the Europe and Central Asia region launched by the World Bank Group in January 2012. As part of the initiative, MIGA seeks to support capital-constrained banks active in the region. The project is also aligned with the World Bank Group’s strategy for Albania, as the country seeks to address the spillover from the financial crisis.

[i] The guarantee was cancelled on  March 30, 2018.