Capital Markets Usage by Development Banks

This paper analyzes the role of capital markets in development finance. It identifies which Public Development Banks issue bonds, examines how and to what extent they leverage their capital, and what insights their market behavior offers. It uses data from the PDB Database (2025) and Bloomberg, covering 522 institutions with combined assets exceeding USD 13.9 trillion as of 2025. Only around one-fourth (139 institutions) access capital markets directly, yet they hold over 88% of sector assets and USD 7.5 trillion in outstanding debt, revealing significant market asymmetries. Market engagement is notably concentrated in Asia and Europe, while institutions from low- and middle-income countries face considerable barriers. Institutional size strongly influences market access, affecting financial leverage, measured by asset-to-equity ratios, and strategic currency choices: local currency for national institutions versus USD for supranational entities (i.e. multilateral development banks).