US and The World Bank Steering Committee Call for Changes to Climate Finance

US Treasury Secretary Janet Yellen pushed for the adoption of a change that would free up funds for climate finance at the World Bank's spring meeting.

The steering committee of the World Bank and U.S. Treasury Secretary Janet Yellen urged for additional reforms this year to strengthen the bank's capacity to respond to crises like pandemics, climate change, and other events that are reversing development progress.

The World Bank will be able to lend an additional $50 billion over ten years while maintaining its top-tier AAA credit rating thanks to a recent wave of balance sheet changes. Yellen hosted discussions with global finance officials to discuss how to intensify those efforts with it and other multilateral development banks.

More "bold action" is required, according to Yellen, to ensure that the World Bank can fight to end extreme poverty, promote shared prosperity, and better confront 21st-century problems including climate change, fragility, and pandemics. She cited the modifications already adopted as having sharpened the World Bank's mission.

We should use the remaining months of the year to adopt additional reforms using a tiered implementation strategy that may be approved by the Board and carried out gradually.

Major Achievements

Later in the day, the bank's steering committee, the Development Committee, met. There, members praised the bank's "Evolution Roadmap" and expressed enthusiasm for further initiatives to reach "major milestones" by the World Bank and International Monetary Fund annual meetings in October.

The committee's head stated in a statement that "they expect the Board of Executive Directors and World Bank Group management to finalise a work plan with specific actions to be taken."

Members reaffirmed their commitment to "ensuring that the World Bank Group has adequate financial capacity to respond to development challenges and support its expanded mission."

They demanded bold strategies for boosting private capital, encouraging investment, and utilising the public sector.

The members were eager to examine additional suggestions made by an impartial panel the previous year, such as improving the availability of the bank's emerging markets database to private investors, enhancing the balance sheet for the low-income lending division, and investigating a voluntary channelling of IMF Special Drawing Rights.

Moving Forward

Future developments, according to Yellen, might be used to maintain momentum for the World Bank's evolution. These included the World Bank and IMF's annual meetings in Morocco in October, the Summit for a New Global Financial Pact, which France will host in June, the Group of 20 Leaders' Summit in India in September, and the United Nations COP28 climate conference, which will take place in Dubai in November and December.

We've all witnessed how risks to global health may upend entire nations and economies, and how instability and conflict can cause substantial emigration flows, she continued.

The U.S. has nominated Ajay Banga to succeed World Bank President David Malpass, who will step down on June 1. According to her, Banga is "the right leader to take the baton from President Malpass and accelerate our work to evolve this institution."

Yellen's request for reforms, according to Malpass, was met with "vigour and speed" by the bank, he told the committee.

There was "widespread recognition" that in order to advance towards these objectives, there needs to be a stronger emphasis on inclusivity, resilience, and sustainability.

Members of the Development Committee congratulated Malpass for leading the WBG during a historically difficult time, which included an enormous increase in finance in response to numerous crises.

Source: climatechangenews.com