DEBT FINANCING. World Bank to invest in new hedge funds

London (Reuters)-the World Bank is investing in a hedge fund to help banks reduce the capital that new rules will force them to set aside against loans to small businesses in emerging markets, the Financial Times reported on Monday.
The International Finance Corp., the private sector lending arm of the World Bank, is putting $ 100 million in a new Fund created by Christofferson Robb & Co, based in London and New York.
The founders of the company's New York are raising more $ 300 million (189 million pounds) of private investors.
The hedge fund will put money to cover unexpected losses in exchange for a cut of a bank. The Fund's money will decrease the Bank requirements under the Basel rules and reduce the impact of stricter rules planned
The FT said the IFC Fund will work mainly with major international banks and will encourage an extra $ 2.5 billion to $ 4 billion of loans to developing countries.
The banks involved will need to recycle the money released by the "launch titles bilateral synthetic capital" that the Fund creates back to developing markets.

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