World Bank urged to reduce equity-to-loan ratio to free up funds for poor countries

Andrea Shalal - Reuters - 03:41
Given big cuts in development aid by Europe and the United States, think tanks and other groups are urging the World Bank to reduce the equity-to-lending ratio of its main lending arm to free up billions in additional lending capacity.
WASHINGTON, April 22 (Reuters) - Given big cuts in development aid by Europe and the United States, think tanks and other groups are urging the World Bank to reduce the equity-to-lending ratio of its main lending arm to free up billions in additional lending capacity.
Reducing the equity to lending ratio of the International Bank for Reconstruction and Development to 17% from 18% would allow the bank to boost its lending capacity by $30 billion to $40 billion without burdening taxpayers or shareholders, or jeopardizing its capital reserves, said Eric Pelofsky, vice president of the Rockefeller Foundation.

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He said a large portion of these new resources could be used to provide loans to help governments rapidly address actual or anticipated budget gaps an...
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