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World Bank urged to reduce equity-to-loan ratio to free up funds for poor countries [Yahoo! Finance]
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urging the World Bank to reduce the equity-to-lending ratio of its main lending arm to free up billions in additional lending capacity. Reducing the equity to lending ratio of the International Bank for Reconstruction and Development to 17% from 18% would allow the bank to boost its lending capacity by $30 billion to $40 billion without burdening taxpayers or shareholders, or jeopardizing its capital reserves, said Eric Pelofsky, vice president of the Rockefeller Foundation. He said a large portion of these new resources could be used to provide loans to help governments rapidly address actual or anticipated budget gaps and shore up health-care networks, water and sanitation systems, or other critical public systems impacted by foreign aid cuts. The bank could also offer short-term, low-interest loans to non-governmental organizations facing program cancellations, layoffs, and even bankruptcy that would help them bridge to new long-term funding models, Pelofsky said. The World
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