Opinion: How callable capital can be used to grow MDB lending capacity

When 44 countries agreed to create the World Bank at the Bretton Woods conference 80 years ago, they knew that financial markets would be suspicious of this strange new nonprofit bank.

So governments put their money where their mouth was. Along with paid-in capital, they committed a hefty chunk of “callable capital” to guarantee World Bank bonds.

It worked a charm. Within a few years, the World Bank had a AAA credit rating and a stellar reputation with bond market investors.