This chapter compares the roles played by regional and subregional multilateral development banks (MDBs) in development financing and attempts to integrate fragmented data and information from a variety of sources. Development financing institutions are situated at the intersection of the international development system and the international financial system. While there are several entities that straddle both systems, the MDBs occupy a unique place because of their specific characteristics and because they interact with most of the actors in both systems. Multilateral development banks are international financial intermediaries whose shareholders include both developing countries that borrow from them and developed countries that do not. They mobilize resources from private capital markets and from official sources to make loans on better-Than-market terms, provide technical assistance and policy advice for economic and social development, and offer a range of complementary services to developing countries and to the international development community. The MDB "model" is perhaps one of the most useful institutional innovations in development finance of the past six decades and, on the whole, these institutions have a reasonably positive track record. Neither private sources nor bilateral agencies could have leveraged financial resources so efficiently. Moreover, there are no other institutions capable of providing a comparable range of products and services to their member countries, including financial resource mobilization, capacity building, institutional development, knowledge brokering, and the provision of international public goods.1 MDBs must preserve a delicate balance among the three main functions they perform: financial resource mobilization with the aim of providing financial resources to developing countries through regular and concessional loans; capacity building, institutional development, and knowledge brokering through technical assistance, grants, policy dialogue, dissemination of best practice and research support; and helping to provide regional and global public goods that cannot be fully provided by national institutions. Not all MDBs are involved in these functions to the same extent, but collectively they cover all of them. There is an inherent tension between the financing and development functions of the MDBs, a tension that has been there since these institutions were created. They serve, on the one hand, as financial intermediaries, and on the other, as development agencies. Performing this delicate balancing act has become much more difficult in recent years, primarily because of the increasing number of issues that MDBs are required to address, the criticisms that have been leveled against them (especially the World Bank), and the debt service problems faced by many of their low-income borrowers. Moreover, in addition to their financing and development roles, these institutions are being asked to play a service role in the provision of regional and global public goods. Although regional and subregional institutions are not as important as the World Bank in the provision and financing of such goods, there is evidence that they are taking a more active role in the provision of regional public goods, and this applies in particular to the Inter-American Development Bank (IDB) and the Asian Development Bank (AsDB).2 Nevertheless, financial resource mobilization can be considered to be the primus inter pares of these three functions. Providing loans to borrowing member countries is an essential condition for the existence of an MDB, and neither of their other two functions could be performed without preserving their financial integrity and technical capacity to make loans. © 2006 United Nations Economic Commission for Latin America and the Caribbean.