Three major challenges AIIB must overcome

Moody's Investors Service gave the Asian Infrastructure Investment Bank its highest possible rating of Aaa, with a stable outlook, on June 29, because of "the strength of AIIB's governance frameworks, including its policies on risk management, capital adequacy and liquidity".

The Beijing-based AIIB has proved successful during its "testing the water" period. Last year, the AIIB committed a total of $1.73 billion to nine projects, achieving its loan target of $1.2 billion for the first year, which amounted to about one-fourth of the total loan committed by the International Bank for Reconstruction and Development and the International Development Association during the same period, which was $7.62 billion in total.

The success of the AIIB could be ascribed to prudential operation, a well-designed legal framework, good governance and, inter alia, the mutual trust among its member states. However, as a new multilateral development bank, the AIIB faces some significant challenges, and it has to overcome three major ones in the next stage.