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Breakingviews: World Bank savings plan

Thursday, October 10, 2013 - 03:20

Reynolds Holding and Christopher Swann discuss how proposed cost cuts could make the World Bank a faster and more efficient lender and stronger competitor against rival sources of capital.

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There's a bit of a shake up at the world bank and that maybe just what the doctor ordered now but doctor of course being medically trained -- in the bank. Jim Young Kim. -- -- proposing some big cuts Chris and -- some efficiencies and that it looks like a good idea what's on on the web when he was appointed just paper a year ago from was worried that he wasn't a financial plan right again for a bank he came over from. From Dartmouth he was. And Dartmouth medically trained executives and they're exactly like a bank and management consultant at the time talking about synergies to a -- coughing thing he wants to slash about 400 million. You know dollars off the ant banks budget that would be about 8%. It really encouraging thing let's face it not so much the money in itself the bank has -- a lot of Latin. It's more that trimming away layers of bureaucracy trying to get the -- ten -- would make. The big problem with the bank of is that it takes so long to get them same strings attached in the united play and it also has competitors there. Think of this is certainly not the lender of last resort to wells is out there competing when he used to have sent via the captive audience right and then of course -- like China and India now have access to capital markets are you have penalties -- state development bank state development bank the thrive it -- -- that gates foundation and I put it in perspective Brazil's development. Bank now land set twice as much as the entire World Bank. Just just within Brazil. Okay. Now that's of course is coming against the back. Drop it's sort of sister or land of the IMF -- begins opening its meetings in Washington I guess tomorrow right yet kind of a bad time to be welcoming welcoming visitors to Washington but that's also a little bit about what their lights and like house guess when you -- in domestic round. Exactly what pro -- that the indictment that you have finance officials from 188. Member countries in the world media descending on the town right. And it just at the time when that the US congress -- -- you know. But it does symbolize that the problem because behind it three years ago had a big reform package is designed to get more power. Two imagining it market right economies like China like Russia India you know at the US congress is just thinking not ratified it they had done it. Congress' sort of it's showing it's not performing well domestically it's not performing well before on the international stage. What can we expect come out of these meetings anything interest in music surprising. That is a tough question you know I think the big debate I could probably end the World Bank reform package trying to update -- -- Yeah and what are the chances that in these are proposed cuts and you know cuts are always a nervous for people especially you work at the back. What has happened of these sort of a slam -- and they definitely going to be -- -- -- -- bank is that tough to reform. That the -- underneath the it's almost member countries aren't that many -- need -- -- -- -- -- case -- you know I think cost cuts one but it's usually it easier so land them in the country for the okay. Well will be watching that will be watching the meetings with the IMF and EC and in the meantime stay tuned for more breaking views tomorrow.