How the World Bank can turn dormant SDRs into billions in new lending

[Gunnar Larson]

What if there was a giant, untapped treasure trove that the World Bank
could mine for tens of billions of dollars in *new, low-cost lending* within
the next 12 months? And what if it could make use of Special Drawing Rights
– the reserve asset created by the International Monetary Fund, many of
which are languishing in central banks and treasuries?

Enter the brainchild of two experts. They propose that the World Bank could
issue a set of bonds denominated in SDRs
<https://t.devex.com/dc/kyXVoDpAY__Vu56MNr4POsOu8-V3XC2wqJP1JI_OWCtc_mhrtlV94S4tyJS8tBBmrhicIer5AM3mv5VVMHR4-oCQmHzKDUi2Edp_Q2nBgBpJLYkod6qQUYUwEtwf9ieGwz2XMFzf-xBaF05CQiMNIcVA62yZljSv9tK2-kFbDwfPRqJDjqkwFD4PK2gLXl8A8NvWAZE0xw_KPu74xWALO6J42zXw92wSocUHofazctsnIYjXVGQCO1IopkBfaB6Za15wNi5u7ra-Ac9nzPG0B0_nkXNxmRfoKn5bvWa6x-g=/Njg1LUtCTC03NjUAAAGKW8nRVpJSflW4-zsQdOIRjfhungx9fDgTRKzfu9pHROZcyFX-2OUyFIOFjaO66yAnH25BB6g=>,
a move that *could double the size of the bank’s primary lending wing* and
give high-income countries a workaround to existing barriers in using those
SDRs to support low-income countries.

Shabtai has the details on this fairly technical proposal. All it will take
is what he calls “financial wizardry” — so we’ll see if the bank and its
shareholders take up the idea.
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