G20 Independent Expert Group's road map for multilateral banks to come out in October
G20 Independent Expert Group on strengthening multilateral development banks (MDBs) will next month come out with a roadmap and a detailned plan to reform these institutions including the World Bank and Asia Development Bank.
The details include proposals that would enable MDBs to harness private capital apart from stepping up their financial capacity, the group's co-chair NK Singh said.
«We are going into greater granularity on how you really achieve this private capital--- what incentive, risk mitigation can you do,» Singh, who is also chairman of the Fifteenth Finance Commission, told ET in an interview.
The report would dwell on an efficient operating model for the MDBs that would be appropriate to meet emergent challenges and develop the ability to harness innovative capital — hybrid and blended — and coordination among them.
It would also consider cohesion and symmetry of purpose that can «come within the MDB family to improve the overall capability and reach», Singh said.
The group, co-chaired by Singh and former US Treasury secretary Larry Summers, had submitted the first volume of its report at the G20 finance ministers and central bank governors meeting in July.
The recommendations figured in the New Delhi G20 Leaders' Declaration.
The report put private capital requirement of MDBs at $500 billion.
Singh said the roadmap specified in the second part of the report will also detail the sequencing of the reforms.
"...the low-hanging fruit, in my view, is clearly the optimisation of the balance sheet," Singh said, adding that other issues including getting more out of the existing equity itself, recalibrating risk appetite, and creative use of guarantees would be in focus.
MDBs' record in being able to get only 0.6
