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Washington DC: As global finance leaders prepare to meet for next week’s World Bank/IMF Spring Meetings, global activists are calling on the Bank to take the bold steps needed to free up the billions of dollars needed to tackle today’s global challenges.

With low- and middle-income countries hit hard by a wave of global shocks, the ONE Campaign is calling on World Bank shareholders to make decisions on the G20’s proposed reform agenda at the Spring Meetings.

In particular, ONE is calling on the Bank’s shareholders to implement the Bank’s Evolution Roadmap and take tangible steps on the G20’s Capital Adequacy Framework (CAF) reforms. These changes would enable the Bank to leverage its existing capital to increase climate and development lending to low- and middle-income countries – while maintaining its core mission of tackling poverty.

Gayle Smith, CEO of The ONE Campaign, said: “This is the moment for an agile and forward-leaning World Bank to lead a global drive to support and sustain the economies of the low- and middle-income countries that are striving for economic progress while battling a pandemic, climate change, a food and energy crisis, and global inflation.”

“But to do that, shareholders must give the Bank the tools it needs. We can’t build a better future with a toolkit from the past. Neither can we prioritize procrastination over progress. The Spring Meetings can set a course that will benefit billions of people and the whole of the global economy, but only if shareholders act.”

ONE is also calling on leaders to take urgent steps to address the burgeoning sovereign debt crisis that is threatening many low-income countries. This crisis is being exacerbated by a slow and ineffective response to countries seeking support through the Common Framework, the G-20 mechanism established to assist countries facing severe debt distress.

Smith continued: “We’re seeing the emergence of a debt crisis that is threatening to paralyze many low- and middle-income countries. Left unchecked, this will have a devastating impact on millions of people around the world, plunge millions into extreme poverty, and erase the economic gains of the last 25 years. We need a systemic solution to the debt crisis that includes all creditors and an effective Common Framework. In the interim, multilateral development banks must step up and in to prevent a looming financial crisis.


*More detail of the policy steps the World Bank should take. For more information please see ONE’s data dive here:

  • Adjust risk appetites: MDB management and governing boards are very cautious and their risk assessments are strongly influenced by the credit rating agencies’ methodologies that don’t fully account for these banks’ secret sauce (callable capital and preferred creditor status). MDBs should build better in-house assessments of risk.
  •  Give credit to callable capital: The MDBs hold US$2 trillion in the form of callable capital – guarantees that shareholders will step in if the banks have trouble servicing their debt (similar to having a guarantor on a rent or mortgage application). This represents 90% of their resources, but most don’t even consider it in their risk assessments. They should.
  •  Innovate: Sharing risk with commercial partners through innovations like the “Room2Run” initiative could unlock lending headroom without requiring new capital. These sorts of innovations transfer some of the risk from a block of loans to a group of investors for a fee, thus freeing up new lending headroom. Issuing non-voting hybrid capital to private investors could also significantly increase available capital and therefore lending capacity.
  •  Improve credit rating agency assessments: The world’s three major credit rating agencies (Moody’s, S&P, and Fitch) issue ratings that influence the cost of borrowing on international markets. The three agencies use different methodologies in determining those ratings, with very different results. S&P Global states that MDBs could nearly triple their loan portfolios without losing their AAA rating, while Fitch’s position is that a change to MDBs’ loan portfolios, such as the greater use of callable capital, could negatively impact their credit ratings. Standardizing the approach could unlock much more lending headroom.
  •   Increase transparency: Better data disclosure and harmonization would help MDB shareholders, credit rating agencies, and private investors more accurately assess the risk of loans. Analysis from available data indicates that preferred creditor status matters a lot: the risk of default and losses is much lower for MDB loans than for loans to the same borrowers by commercial banks.