Confederation / Confederal system of government is the type of government in which sovereign states come together as autonomous bodies to form a loose political union in which the central government is subordinate to the components governments.

Development bank may be defined as a financial institution set up purposely to offer long term loans meant for development projects while commercial bank may be defined as a financial institution which carries out retail banking services, set up for keeping and lending money to people, owned by organisations, individual or governments, for the purpose of making profits.