The United States (US) has praised the G20 independent expert group’s report on strengthening multilateral development banks (MDBs), particularly its emphasis on broadening banks’ mandates to cover global public goods, improving operating systems by altering culture, incentives, and risk-taking preferences, and ensuring greater public sector involvement.

US Treasury Secretary Janet Yellen supported the prompt implementation of the capital adequacy framework recommendations at a press conference in Gandhinagar, where she attended the third G20 finance ministers and central bank governors (FMCBG) meeting, despite delaying a decision on a capital increase for the time being.

She added, “I believe that we should only explore capital increases after considering the reforms that I laid out along with those in the report. We should build better banks, not just bigger ones.”

Before the World Bank and International Monetary Fund’s annual meetings last year, the US joined other shareholders in calling for an evolution of the MDB system, said Yellen.

“The World Bank is updating its mission statement and refreshing its operating model. And we are working with the World Bank and the regional development banks to implement measures that will more efficiently leverage the resources they have. Our reforms to the World Bank’s balance sheet will responsibly unlock as much as $50 billion in additional lending capacity over the next decade.”

According to Yellen, the MDB system can unlock $200 billion over the next ten years merely from the actions that are already being taken or are being discussed as part of what is now known as balance sheet optimisation.