A U.S. Treasury official told Reuters earlier this week that it was too soon to consider such an increase and the World Bank needed to review its balance sheet and shift resources away from higher-income emerging markets such as China toward countries with greater needs.
The bank had originally set a goal of its shareholders deciding on a capital increase at this week’s World Bank and International Monetary Fund annual meetings. In a communique issued on Saturday, the World Bank and IMF joint development committee directed the institution to look at any and all options.
“We ask the Board and Management to review all possible options to enhance the World Bank Group’s financial capacity and develop a package of measures, including internal levers and general and selective capital increases, for Governors’ consideration, with the aim of reaching a decision at the 2018 Spring Meetings,” the committee said.
A World Bank official said these options could include a selective capital increase with only certain countries contributing, a general capital increase from all shareholders or internal measures to stretch resources such as raising interest rates for higher-income borrowers, adjusting equity-to- loan ratios higher, or other steps that would not need the approval of shareholders.
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