Washington: US Treasury Secretary Janet Yellen on Thursday asked incoming World Bank Group President Ajay Banga to “get the most out of the bank’s balance sheet” and raise more private capital for climate finance and global development objectives, the Treasury said.
During a meeting with Banga a day before the former Mastercard CEO took over at the World Bank, Yellen expressed her strong desire to continue working closely with him on the lender’s development to address climate change and other global challenges. Did.
This includes continuing to implement the recommendations of last year’s G20 report on capital adequacy, which argued that changes to multilateral development banks could unlock hundreds of billions of dollars in new lending.
Under Banga’s predecessor, David Malpass, the bank’s shareholders in April approved an initial round of balance sheet changes to expand lending by up to $50 billion over 10 years while maintaining its top-tier AAA credit rating. But Yellen has insisted that further debt reform and other changes will be made on a “rolling basis” in the coming months.
Yellen said that continuing to implement these reforms would “provide the maximum benefit from the Bank’s balance sheet” and “refine the operating model for our shared growth objectives and to increase the Bank’s accountability and agility” and make it more private. Will raise capital. Said.
He also said that the World Bank needs to work closely with its associate development banks.
“Secretary Yellen stressed the need for the Bank to support its poorest member countries as they face a range of challenges, including global macroeconomic headwinds unleashed by Russia’s war in Ukraine,” the Treasury said.
Banga, 63, was elected as the President of the World Bank on May 3 for a five-year term. Nominated by US President Joe Biden, the Indian-origin finance and development expert was the only contender for the job.
The US, the World Bank’s largest shareholder, has traditionally chosen an American to run the World Bank, while Europe has chosen to head the International Monetary Fund. Banga, a US citizen since 2007, begins his new role on Friday.
In a separate LinkedIn post, Malpass highlighted the increase in the bank’s climate finance for developing countries during his tenure, which more than doubled to a record $32 billion last year, as well as the World Bank’s efforts to contain COVID-19. $440 billion was raised for overlapping crises. COVID-19, war in Ukraine, food and energy price shocks, supply chain disruptions, and unsustainable debt.
Malpass has pushed for greater debt transparency and restructuring, particularly on China’s loans to poor countries. He said the huge accumulation of government debt threatens to sap the dynamism from the global economy.
“Without change, the world will face a long period of slow growth – and developing countries will be hardest hit,” he said.
(Reporting by David Loder; Editing by Richard Chang and Chris Reese)
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