What role can the banking and insurance sectors play during reconstruction?
In the immediate term, financing will be required for the importation of capital goods and associated commodities to rebuild damaged infrastructure. The importers will be local and central government entities or contractors acting on behalf of such entities. The banking sector will provide some of the credit, but given the magnitude of the damage and amount of financing required to repair or replace infrastructure, banks may require assurances that they will be repaid. Even with government guarantees, however, some banks may require additional assurances that they will be repaid. The banks can purchase insurance either from private sources or export credit agencies for this risk. ADB can also provide domestic and foreign banks repayment guarantees.
