MDBs have $750bn in reserve financial capacity - use it now
The World Bank and five major regional multilateral development bank — the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank — have the latent financial firepower to quickly ramp up development financing in response to the COVID-19 crisis, according to this op-ed.
The six major MDBs could increase their loan books by an additional $750 billion — 160% above current levels — without threatening their AAA bond rating, which MDBs need to raise funding in global capital markets, according to a briefing paper by the Overseas Development Institute.
This estimate incorporates conservative assumptions and safety margins and does not include the recent increases of paid-in capital for the World Bank and African Development Bank, meaning actual lending headroom is likely even higher.
