UPDATE 2-Yellen to push development bank evolution at spring meetings - Yahoo Finance
UPDATE 2-Yellen to push development bank evolution at spring meetings
(Adds quotes from Treasury undersecretary)
By David Lawder
WASHINGTON, April 10 (Reuters) - U.S. Treasury Secretary Janet Yellen on Wednesday will host a roundtable discussion on further steps to evolve the World Bank and other development lenders to tackle climate change and other global crises beyond a $5 billion annual World Bank lending expansion, the Treasury said.
The discussion on the sidelines of the World Bank and International Monetary Fund Spring Meetings will bring together finance ministers from major shareholders and borrowing countries that will cover "ways to maintain momentum to evolve the multilateral development banks to better meet current challenges," the Treasury said in a statement.
The World Bank has proposed balance sheet changes that would quickly allow it to lend an additional $50 billion over 10 years while maintaining its top-tier AAA credit rating, a step that bank shareholders are widely expected to adopt this week.
U.S. Treasury Undersecretary Jay Shambaugh said the reforms amounted to a "once in a generation transition" of the institutions, and called the World Bank's plans a "downpayment" on the reforms that would be deepened in time and spread to other multilateral development banks.
"This was the low-hanging fruit. These were the things we could accomplish in six months after the charge went to the bank," he told an event hosted by the Brookings Institution on Monday. "We definitely don't view that as a stopping point."
Shambaugh said it was important to fix the banks' operational structure and incentives and ensure effective use of funds, noting that some of the development banks had "considerable room" on their balance sheets.
A senior Treasury official said Yellen would discuss changes aimed at harnessing more private capital and creating public-private partnerships to tackle climate change and other global problems such as pandemic preparedness and economic fragility.
The official said Yellen was hoping to lay out another roadmap to make more progress on the banks' operational models and financial capacity. (Reporting by David Lawder; additional reporting by Andrea Shalal, Editing by Leslie Adler, Chizu Nomiyama and Josie Kao)
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”