Breaking News
Investing Pro 0
Free Webinar - Decode the market's secrets! | Tuesday, May 30, 2023 | 01:00PM EDT Enroll Now

U.S. Treasury's Yellen calls for World Bank revamp to tackle global challenges

Published Oct 06, 2022 11:01AM ET Updated Oct 06, 2022 06:50PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. U.S. Treasury Secretary Janet Yellen participates in a discussion at the annual Freedman's Bank Forum at the Treasury Department in Washington, U.S., October 4, 2022. REUTERS/Michael A. McCoy

By David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Thursday urged the World Bank Group and other multilateral development banks to revamp their business models and dramatically boost lending to address pressing global needs such as climate change.

In a speech ahead of next week's World Bank and International Monetary Fund annual meetings, Yellen said she would ask World Bank management to develop an "evolution roadmap" for changes by December, with "deeper work" beginning by the spring of 2023.

Among changes she is requesting are plans to harness more private capital and use more concessional loans and grants to fund investments that more broadly benefit the world, such as helping countries transition away from coal power.

"Given the scale of the challenges, the development banks must continue to explore financial innovations to responsibly stretch their existing balance sheets," Yellen said at the Center for Global Development, a think tank in Washington.

Her directive was made just weeks after World Bank President David Malpass came under fire for declining to say whether he accepted the scientific consensus on global warning.

Malpass said his answer to a question on the topic at a forum was mishandled and that he believes human activity is responsible for climate change, but no shareholders have asked him to resign.

A World Bank spokesperson said the institution was actively working to expand climate-related trust funds, grants and donor guarantees as it explores ways to increase lending capacity.

"We welcome the discussion on capital adequacy and Secretary Yellen's leadership on the evolution of IFIs (international financial institutions) as developing countries face a severe shortage of resources, the risk of a world recession, capital outflows, and heavy debt service burdens," the spokesperson said in an emailed statement.

Yellen made clear that climate change was a prime example of a global challenge that required changes by development banks, calling it "an existential threat to our planet."

She announced a $950 million Treasury loan to the Clean Technology Fund (CTF), a multilateral trust fund that helps developing countries accelerate their transition from coal power to clean energy, the first of its kind from the Treasury.


Yellen said the World Bank and other multilateral development banks (MDBs) need to adopt stronger targets for mobilizing private finance and deploy a broader range of instruments, including loan guarantees and insurance products.

She said MDBs needed to preserve their ability to borrow from financial markets, but did not mention the debate over whether they could accept lower credit ratings.

Nancy Lee, a senior policy fellow at the Center for Global Development, said the World Bank could boost lending capacity by hundreds of billions of dollars without jeopardizing its credit rating. This could be done by including callable capital - money pledged by governments but not currently "paid-in" - as part of its capital adequacy framework, she added.

The development think tank and other groups are advocating that the World Bank also launch a "green capital increase" focused on boosting lending to address climate change.

On macroeconomic issues, Yellen said the top priority for countries facing high inflation was to return to an environment of stable prices - a fight she said was primarily the responsibility of central banks.

She said the Group of Seven members have "committed to market-determined exchange rates. But we are attentive to the political consequences of exchange rate movements."

U.S. Treasury's Yellen calls for World Bank revamp to tackle global challenges

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Ferdinando Riboni
Ferdinando Riboni Oct 06, 2022 11:19AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
America owns the World...obey
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email