LEADERS of the BRICS emerging market nations launched a US$100 billion development bank and a currency reserves pool in Brazil on Tuesday in their first concrete step toward reshaping the Western-dominated international financial system.

    The New Development Bank aimed at funding infrastructure projects in developing nations will be based in Shanghai, and India will preside over its operations for the first five years, followed by Brazil and then Russia, leaders of the five-country group announced at a summit.

    They also set up a US$100 billion currency reserves pool to help countries forestall short-term liquidity pressures.

    It is the first major achievement of the BRICS countries — Brazil, Russia, India, China and South Africa — since they got together in 2009 to press for a bigger say in the global financial order created by Western powers after World War II and centered on the International Monetary Fund and the World Bank.

    The new bank reflects the growing influence of the BRICS, which account for almost half the world’s population and about one-fifth of global economic output.

    The bank will begin with a subscribed capital of US$50 billion divided equally between its five founders, with an initial total of US$10 billion in cash put in over seven years and US$40 billion in guarantees. It is scheduled to start lending in 2016 and be open to membership by other countries, but the capital share of the BRICS cannot drop below 55 percent.

    The contingency currency pool will be held in the reserves of each BRICS country and can be shifted to another member to cushion balance-of-payments difficulties. This initiative gathered momentum after the reverse in the flows of cheap dollars that fueled a boom in emerging markets for a decade.

    The new bank would give developing countries a greater say in the international financial order, a theme President Xi Jinping struck ahead of the summit, Xinhua News Agency reported.(SD-Agencies)