The Secretary of the Treasury of the United States called on the World Bank and other multilateral development banks to renew their business models to move from country-specific financing to addressing global needs such as climate change and leveraging more risk capital .
Janet Yellen said she will ask World Bank management to develop an “evolution roadmap” for changes by December, with “deeper work” beginning in spring 2023.
His directive comes just weeks after World Bank President David Malpass was criticized for refusing to say whether he accepts the scientific consensus on global warming.
Malpass said his response to a question on the topic on a forum was misconstrued and that he believes human activity is responsible for climate change. No shareholder asked him to resign.
Yellen said the World Bank and other multilateral development banks must adopt stronger targets to mobilize private finance and deploy a broader range of instruments, such as loan guarantees and insurance.
“Given the magnitude of the challenges, development banks must continue to explore financial innovations,” Yellen said, adding that banks must preserve their ability to borrow from financial markets.
Turning to macroeconomic issues, Yellen said the top priority for countries facing high inflation is to return to a stable price environment, a struggle she said is primarily the responsibility of central banks.
