Ideas on a postcard
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Ideas on a postcard

To paraphrase American satirist PJ O'Rourke, if you buy yourself something with your own money, odds are that you'll spend time making sure you get exactly what you want. If you spend your own money on something for someone else, you won't be quite as careful. But if you're given money by one person and told to buy something for someone else, you're likely not to be careful at all.

Governments are one kind of institution that falls into the last of these categories, multilateral agencies are another. We don't generally trust governments to spend taxpayers' money wisely, and if the European Bank for Reconstruction and Development's recent record in Russia is anything to go by we should not expect multilaterals to do so either.

The EBRD's Russian losses have cost it more than all the profits it has ever made. Its investment bankers, particularly those responsible for the bank's investments in financial institutions, have learnt too late that they were powerless to protect their shareholders' money. Only the recent news that the Russians are demanding 75% write-offs on $100 billion of Soviet-era debt may make them feel that things could have been worse.

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