New Delhi: With Expert Group On Strengthening Multilateral Development Banks (mdbsupport of finance minister Nirmala SitharamanFollowing the call for “transformational change”, the focus has now shifted to higher capital requirement in these entities, which the panelists believe should come in an accelerated manner rather than in a staggered manner.
The need for higher capital, which is also outlined in the World Bank’s future road map, is seen as critical for agencies to meet the needs of poorer economies as well as meet the challenges in their quest for greater prosperity. . global public goods. Climate issues are also embedded in this.
After meeting with Sitharaman on Saturday, significant increase in capital base of MDBs was discussed expert The group is co-chaired by Larry Summers, Professor Emeritus at Harvard University, and 15th Finance Commission Chairman N.K. Singh did “Significant growth is the inevitable priority of the World Bank Group working in tandem with other MDBs,” a source told TOI.
In addition, some of the recommendations of the Capital Adequacy Framework Report, such as raising leverage as well as removing the statutory debt limit, may be supported by the group.
But as the reform road map drawn up by World Bank staff suggested, these changes would only add an additional $50 billion in lending capacity over a decade, with hybrid capital also playing a role. The Expert Group also recognizes that there is a need to ensure that the share of concessional finance, most importantly the International Development Association, which is important to African countries, is maintained.
During the panel’s discussions with other multilateral development banks such as the ADB, the African Development Bank and the New Development Bank, it emerged that systemic changes were needed that could help them retain their identity while creating complementarities. One question is whether the headroom available with one can be shared with another MDB, a source said.
In addition, the role of private capital is being scrutinized, particularly to ensure that it does not walk away from green finance with rewards or high returns, while the risk is borne by others, including the sovereign.
In this context, some of the suggestions contained in the World Bank paper will be considered, along with the previous recommendations of the Eminent Persons Group, headed by Senior Minister of Singapore Tharman Shanmugaratnam.
The expert group is expected to expand its consultation to include domain experts and NGOs.
The need for higher capital, which is also outlined in the World Bank’s future road map, is seen as critical for agencies to meet the needs of poorer economies as well as meet the challenges in their quest for greater prosperity. . global public goods. Climate issues are also embedded in this.
After meeting with Sitharaman on Saturday, significant increase in capital base of MDBs was discussed expert The group is co-chaired by Larry Summers, Professor Emeritus at Harvard University, and 15th Finance Commission Chairman N.K. Singh did “Significant growth is the inevitable priority of the World Bank Group working in tandem with other MDBs,” a source told TOI.
In addition, some of the recommendations of the Capital Adequacy Framework Report, such as raising leverage as well as removing the statutory debt limit, may be supported by the group.
But as the reform road map drawn up by World Bank staff suggested, these changes would only add an additional $50 billion in lending capacity over a decade, with hybrid capital also playing a role. The Expert Group also recognizes that there is a need to ensure that the share of concessional finance, most importantly the International Development Association, which is important to African countries, is maintained.
During the panel’s discussions with other multilateral development banks such as the ADB, the African Development Bank and the New Development Bank, it emerged that systemic changes were needed that could help them retain their identity while creating complementarities. One question is whether the headroom available with one can be shared with another MDB, a source said.
In addition, the role of private capital is being scrutinized, particularly to ensure that it does not walk away from green finance with rewards or high returns, while the risk is borne by others, including the sovereign.
In this context, some of the suggestions contained in the World Bank paper will be considered, along with the previous recommendations of the Eminent Persons Group, headed by Senior Minister of Singapore Tharman Shanmugaratnam.
The expert group is expected to expand its consultation to include domain experts and NGOs.