The China-sponsored Asian Infrastructure Investment Bank was formally launched over the weekend. Many observers have seen it as a rival to the World Bank. Others saw in another vehicle that would be used to facilitate the internationalization of the Chinese yuan. We have consistently argued that these ideas are a serious exaggeration. News that AIIB will lend only US dollars supports our claim. It seemed obvious that most members would fund their quota in dollars. It also seemed obvious that most borrowers would have little use for yuan. Surely the world can use more development banks. The AIIB will co-finance some ... (full story)