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World bank admits Chinese bank pressure

World-Bank news

A World Bank Group executive admitted on Sunday the bank is under pressure to reform as more countries are joining a new China-backed investment bank.

“We are getting a strong push to change quickly,” Cyril Muller, vice president of the World Bank Group, said at the annual Boao Forum for Asia.

Muller also gave tacit support to the idea of creating a new investment bank from scratch.

“Each of the world’s [major financial institutions] learn from each other and I pretty much share the view that starting with a clean sheet of paper is a good idea,” he told delegates.

But Muller objected to the view that there is tension in the World Bank between the US, Japan and Europe on one side and emerging countries including China on the other.

“It’s not totally true. There are groups that blend these sets of interests and this helps build consensus and understanding.”

Beijing’s initiative to set up a new bank by the end of the year to fund rail, road, power and other projects has been a focal point of the economic conference.

The Asian Infrastructure Investment Bank (AIIB) is seen by some as a potential rival to the US-dominated International Monetary Fund and the World Bank, and the Japanese-dominated Asian Development Bank.

The forum continued Sunday as Australia announced its interest in joining the AIIB as a founding member.

Britain, Germany, France and Italy have decided to join, while Russia signed up to the plan on Saturday.

China has hosted the annual conference in Hainan’s Boao resort area since 2002. Its founders hope it can evolve into an Asian version of the annual World Economic Forum in Davos, Switzerland.

Source:  Fin24

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