Russia and China have had enough of western banking
CNNMoney - May 04, 2015
President Vladimir Putin approved a new $100 billion reserve fund over the weekend that will specifically aid the BRICS nations: Brazil, Russia, India China and South Africa.
It's another step by the BRICS to build an alternative so they don't have to go to the United States or the International Monetary Fund for any financial help.
BRICS leaders first agreed on the new fund -- seen by many as a power play against the west -- at a conference last July. The BRIC countries make up 40% of the world's population and about 20% of the world's economic activity.
The reserve fund will help BRICS countries with cash problems. It will get most of its seed funding from China, which will contribute $41 billion. Russia, India and Brazil will put in $18 billion each, and South Africa will give $5 billion. The timing is critical as many emerging market nations and businesses are struggling to pay their debt for various reasons.
China is also moving forward with its own investment bank, the Asian Infrastructure Investment Bank, which America isn't supporting financially.
That bank has quickly become a thorny issue for President Obama. European nations, such as Britain and Germany, defied U.S. requests to withhold membership, and chose to back China's bank.
