The foundation this week of the BRICS Development Bank has highlighted the problems with the current system of global assistance and governance – particularly from the U.S., says Jim O'Neill, the former chairman of Goldman Sachs Asset Management.
Renowned investor Jim O'Neill found international fame during his 18-year career at Goldman Sachs by coining the term BRIC to describe the emerging economies of Brazil, Russia, India, and China.
Those developing countries, along with South Africa, have agreed to create a development bank this week that will have a currency reserve that will be capitalized at $100 billion. The new bank will be modeled after Washington DC-based organizations the World Bank and International Monetary Fund (IMF), which emerging economies have long complained were too Western in their approaches to economic assistance.
"It's quite a development," O'Neill told CNBC.
"The most important thing is that it's now a permanent sign that global governance is a mess. Global governance has not kept up with the pace of global economic change," he said.