04 Oct Is the World Bank “Too Big To Fail”?
Via Instapundit, I notice that the World Bank is facing capital shortfalls that could put out of “business” in twelve months.
“By the middle of next year we will face serious constraints,” said its president Robert Zoellick, as he launched a major campaign to persuade rich nations to pour more money into the Washington-based institution.
He conceded that such a task was likely to be extremely difficult, given the difficulties facing countries in the wake of the developed world’s biggest recession since the Second World War. However, Mr Zoellick, speaking at the opening of the IMF and World Bank annual meetings in Istanbul, said the Bank needed a capital increase of as much as $11.1bn (£6.9bn) to keep functioning. He said he hoped that its shareholders, including the UK and other leading nations, would decide on resources before its spring meeting next April.
In the grand scheme of things, $11.1 billion is not that much, especially divided between the various shareholders of the World Bank. Still, this might be a good opportunity to assess what exactly the World Bank is doing and whether it really is all that vital. I have my doubts. Congress might decide to get a bit stingy here since they would have to OK any further American investment in the World Bank. Then again, they haven’t exactly been very stingy with the other banks. Is there any TARP money left?
The World Bank has already thrown too much money into the coffers of Third World “rat holes”. The more welfare the World Trade Bank passes out the greater the dependence on charity.
Welfare is the shortcut to the Massa’s Plantation.
The World Bank has already thrown too much money into the coffers of Third World “rat holes”. The more welfare the World Trade Bank passes out the greater the dependence on charity.
Yes! We should put a reliable neocon in charge to reign the bank in!
[/sarcasm]
As long as the major industrial nations of the world still approve of what the IBRD does, and how it does them, they shouldn’t have too much difficulty finding that money. It looks like all sorts of government officials have already expressed support for the bank, but in diplomacy talk is even cheaper than normal, so we’ll have to wait and see.
According to an op/ed by Senator Thune, there is $330 billion (!!!) of TARP remaining. Whether Mr. Ku was being facetious or not, it would be interesting what argument might be made to use TARP to infuse the World Bank with more capital.
[…] the World Bank too big to fail? Of course not. It should be judged on its success and its return to its partners. If it is […]