DURBAN, South Africa, March 27 (UPI) -- The BRICS nations of Brazil, Russia, India, China and South Africa agreed to set up a bank for infrastructure development, China's finance minister said.
Speaking in Durban, South Africa, site of the fifth summit of the BRICS nations, Chinese Finance Minister Lou Jiwei confirmed the agreement on the bank during a meeting of fellow financial ministers of the five countries.
He said the ministers "have agreed that the set-up of the development bank is feasible and reasonable," the official Chinese Xinhua News Agency reported.
Lou said it was agreed a bank to fund infrastructure projects in the member nations is needed, but that the meeting did not discuss details like initial investment of each country to the bank.
"What we have now is just a general picture," Lou said, adding details may be worked out by next year.
The Chinese minister, apparently allaying any concern a BRICS bank might challenge institutions such as the U.S.-led World Bank or the Asian Development Bank, said the bank would complement such existing institutions.
However, Lou also said the current global economic situation remains complicated and such steps as quantitative easing have created an unfavorable external environment for the BRICS nations.
Separately, the China Daily, quoting Jim O'Neill, chairman of Goldman Sachs Asset management who is credited with coining the BRICS acronym, said a BRICS bank could help promote more trade among the countries making up the group.
"If, in fact, the BRICS bank is announced, this will be the beginning of an institution that sort of becomes a World Bank for their huge sphere of influence," O'Neill told China Daily in an interview.
The bank concept evolved last year at the New Delhi BRICS summit as a way to promote long-term investment possibilities through pooled funds for targeted infrastructure projects, while supporting increased commerce between the BRICS and other emerging economies.
O'Neill was quoted as saying the BRICS countries, other than South Africa, have grown much bigger more quickly than he had expected despite some loss of momentum in the past year. In 2011, the combined BRICS GDP increased by $2.3 trillion.
"By 2015, if not before, the combined size of the BRICS economies seems highly likely to become as big as the U.S. and they are set to become as big as the G7, as we assume, by 2027," O'Neill said. "It is transforming everything in the world economy, including the patterns of world trade and finance."