G20 backs boosting ADB's capital by $100 bln
HORSHAM, England, March 14 (Reuters) - G20 finance chiefs backed on Saturday a tripling of the Asian Development Bank's capital to just over $150 billion and said other development banks should consider whether they need more to fight the crisis.
In response to calls from Brazil, China, Russia and India, the G20 said they would bring forward global expenditure to support financing to developing countries by $100 billion over the next three years.
"The Asian Development Bank should immediately proceed with a substantial general capital increase of 200 percent or $100 billion," G20 finance ministers and central bankers said in a statement.
"G-20 members, through their involvement in the Boards of Governors, commit to urgently review the adequacy of the capital resources of all MDBs (multilateral development banks) to provide appropriate increases in funding to mitigate the consequences of the crisis," they said.
The move comes amid concern over the sharp fall in capital flows to emerging markets, starving them of credit needed to keep their economies going.
The world's largest emerging economies said on Friday that the collapse of private capital this year was likely to continue into 2010, making it imperative that international financial agencies step up lending.
"It is imperative that multilateral financial institutions should expand their lending to offset the massive decline," said Brazil, China, Russia and India, known as the BRICs.
Multilateral development banks, like the ADB, should seek to offset the flight of capital and fuel demand "by providing a consolidated basis for fiscal expansion, support to social safety nets, trade financing, bank recapitalization, and infrastructure investment," the G20 said in a statement.
The G20 said they would review the capital needs of African Development Bank and the Inter-American Development Bank at annual meeting this year and called on the European Bank for Reconstruction and Development to "promptly review its statutory capital constraints to give leeway to interventions".
It said the Islamic Development Bank had a reasonable level of resources but should keep its needs under review as the situation in its member countries evolved.
The G20 also urged the World Bank to reform ownership and internal governance to give more say to emerging markets and developing economies by the 2010 Spring Meeting.
