Author: Valencia M

Funding Hybrid Capital at the AfDB is the Best Deal for SDR Donors

Many advanced-economy countries are looking for ways to recycle their excess Special Drawing Rights (SDRs) to support more vulnerable countries whose economies are being buffeted by the economic aftermath of the COVID-19 pandemic and the Russian invasion of Ukraine. The G20 has pledged $100 billion of SDR recycling—much of that is going to the IMF, but about $40 billion has yet to find a destination.

A new proposal by the African Development Bank (AfDB) gives donors an excellent opportunity to recycle their SDRs, potentially having a much more significant impact than traditional recycling methods and making a bit of a profit too.

Here are the five reasons why countries should recycle at least some of their SDRs to the AfDB as hybrid capital:

  • Every SDR100 million recycled to the AfDB will be multiplied to increase loans to vulnerable African countries by SDR200-400 million. The AfDB will leverage these SDRs as capital to mobilize more lending funds. The bank will then loan these funds to support a sustainable transition throughout the African continent. The AfDB has the regional expertise and connections to make these loans effective.
  • The SDRs are never themselves spent. The AfDB will hold them as capital in its SDR account at the IMF. They would be pulled out of that account only if the loans they supported through leverage went bad, and as a last resort. And with the AfDB’s sound financial management practices, the chances of that happening are virtually nil. The AfDB has a AAA rating and the ratings agencies have welcomed this new form of capital.
  • There will not be any call on central banks’ currency reserves through this kind of recycling. Some central banks worry that recycling SDRs could strain central bank reserve management. For example, if an advanced country were to recycle its SDRs directly to a vulnerable country, the vulnerable country would likely then exchange those SDRs for hard currency (dollars, euros, yen…) because it couldn’t buy things (like vaccines) with SDRs. That exchange would draw on the reserve currency of some central bank—perhaps even that of the country that recycled the SDRs. If volumes got large, this could strain the cash reserves of some countries. But there is no need for such worries with the AfDB scheme because the SDRs are held as capital at the IMF. They are not lent to vulnerable countries.
  • The hybrid capital model preserves the SDRs’ reserve asset characteristic (RAC). In calling for $100 billion worth of SDR recycling, the G20 insisted that any recycling maintain the RAC—meaning that the SDRs can be redeemed on demand and are as close to risk-free as possible. The AfDB has designed its hybrid capital scheme with these characteristics in mind. While it is up to each lending country to interpret the RAC, the IMF staff has confirmed that SDRs invested in AfDB hybrid capital would count as reserves in the IMF’s official statistics.
  • Countries recycling SDRs to the AfDB could make a small profit on their investment. Recycling SDRs is costly to advanced-economy countries because they must pay the SDR interest rate to the IMF (see blog here). But as part of the agreement to lend the AfDB their SDRs for hybrid capital, the AfDB will pay interest to them slightly above the SDR interest rate. So that more than covers the cost of recycling. The AfDB covers these costs with the interest they receive on their loan. The interest rate they charge will be between the SDR rate and the market rate. So everyone benefits: the SDR donor gets a slight premium on the SDR rate, and the borrowing country gets a loan from the AfDB at a slight discount from the market rate. And if the donor countries are generous, they could agree to forego the interest payments on the recycled SDRs and give the AfDB more financial flexibility.

While recycling SDRs through the IMF’s Poverty Reduction and Growth Trust or its Resilience and Sustainability Trust are essential avenues for a lot of the recycling, they don’t utilize the power of the SDR as fully as the AfDB scheme: the leverage ratio is less than one, the SDRs are spent, countries trade them for hard currency, and there is no profit (but also no loss) for the donor country.

Countries that have yet to decide how to recycle SDRs should look very hard at the AfDB scheme and include AfDB hybrid capital as part of their SDR recycling portfolio.

If You Want Clients to Borrow from the World Bank for Net Zero Investments, Make It Easier

High-income countries trying to reach net-zero targets are confronting the fact that existing environmental regulations make it harder to build low-carbon infrastructure. Lobbying groups in the US, for example, are using regulatory tools to block geothermal, solar, and wind facilities. Providing subsidies and incentives for low carbon isn’t enough: revisiting, rewriting, and in some cases retiring these regulations is going to be a vital part of faster progress toward the green economy.

The issue isn’t unique to high-income countries, and it is perhaps particularly important when it comes to climate finance. That’s because multilateral development banks including the World Bank are being asked to do more on climate, but they are constrained by their own bureaucracy, including a set of environmental regulations that add costs and delays to investments that could support global mitigation goals.

Look at answers to World Bank client surveys in some of the countries where you might hope the institution would have a big role to play in financing mitigation projects.  When asked what the World Bank’s greatest weakness is, the top answer in Brazil: “processes too slow and complex.” That’s the same top answer as Indonesia and Vietnam. Complex and slow processes rank second out of sixteen and in India and Argentina, and fourth in South Africa and Türkiye. Good project preparation takes time, and rushed projects tend to have worse development outcomes. Nonetheless, there clearly can be too much of a good thing in terms of bureaucracy.

The bureaucratic hassles of borrowing from the World Bank are surely one factor behind seemingly low demand from clients for IBRD lending outside of times of crisis.  (Dated) survey evidence suggests that client countries view the Bank as a lender of last resort with infrastructure in particular because of the costs of doing business, something also reported by World Bank staff in a 2010 Independent Evaluation Group survey. The response shouldn’t be to take scarce grant resources and use them to fund inefficient subsidies to drum up demand for climate lending in IBRD countries, it should be to reform lending processes and approaches to make borrowing from the IBRD for climate mitigation at the institution’s unsubsidized (but below-market) rates more attractive.

Part of that process should involve looking at lending instruments and safeguards. The World Bank has two main financing instruments: broad policy lending and specific investment financing.  It also divides potential projects into four main categories based on potential environmental impacts: Category A; where the potential impact is large and borrowers and the bank need to undertake assessments and agree mitigation measures; Category B which is lower risk but still requires assessment and mitigation; and Category C which is likely to have minimal or no adverse environmental impacts. A separate category, F, involves projects where funds flow through a financial intermediary.

We can look at the impact of project type and environmental assessments on the bureaucratic burden of project preparation by comparing the length of time it takes to get a project from initial idea to World Bank board approval. Analysis by Christopher Kilby suggests that project preparation times are primarily a function of World Bank processes rather than recipient country characteristics, down to factors including loan type and amount (and US interest in the client country). Kilby’s results suggest Structural Adjustment Programs and Development Policy Loans take 240 days shorter to prepare than investment projects, while a project in a country directly represented by an Executive Director on the World Bank’s board is associated with a 52 day reduction in preparation time. In a later paper with Kevin Gallagher, Kilby looks at the impact of Environmental safeguard categorization and suggests projects have a typical preparation time of 293 days with no safeguards and 416 days with safeguards, though there is some evidence of convergence in preparation times with more recent projects.

We use the database examined by Kilby to look at the impact of environmental assessments in particular, updated through 2021. One missing element in that database (as reported by Kilby) is the date when the project was conceived, but luckily World Bank project ID numbers, which are in the database, are issued sequentially. That means we know project 134156 was greenlighted for preparation by World Bank management just after project 134155 and just before project 134157, for example.  We exclude projects prior to 1994 and project IDs below 20,000 (which do not follow a fully sequential numbering system) as well as recent projects (project number above 175,000), because the slower projects won’t have reached the Board yet. We drop earlier loans without an approval date (themselves dropped from the project pipeline). And we drop loans without an IBRD or IDA commitment amount, in order to focus on traditional World Bank projects. We then run the following regression:

[Approval date] – [average approval date of 100 closest below and above projects by ID]

=

[Total IBRD + IDA commitment] + [(Exclusive) IDA financing dummy] + [IDA/IBRD blend dummy] + [Instrument (structural adjustment/policy lending dummy)] + [Sector/theme of infrastructure] + [Environmental assessment category dummy (one each for A, B, F, and other)]. 

The sector/theme dummy is a 1 if the project theme/sector codes mention any of the words energy, power, water, road/roads, transport, irrigation, port/ports, airport/airports, infrastructure, construction, or housing, and 0 otherwise.

The regression results report how many days, more or less, a project with particular features takes to make it to the World Bank board for approval than the average of projects initially conceived at around the same time. The first column reports results for the whole sample, the second column for the second half of the sample (with the earliest Board approval in 2008), and the third column for the last quarter of the sample (with earliest board approval in 2015).

The results suggest that:

  • Project size (commitment amount) is not a major factor in length of project preparation (a $100 million project will take about nine more days than a $10 million project).
  • Compared to projects initiated at about the same time, those projects that are purely finance by IDA as compared to IBRD projects take 71 fewer days to reach Board approval, although that effect is not apparent more recently (when IDA/IBRD blend projects appear to take longer).  
  • Policy lending takes 107 fewer days to reach the board than investment lending (72 days less in the most recent sample).
  • Projects that involve infrastructure do not take longer to be approved—this allowing for other features included in the regression.
  • Environment category F and B add about 100 days to project preparation while category A projects take nearly a year longer to reach the board, although delays have declined over time (to 43 days in the last quarter of the sample for Category B and 189 days for Category A). Perhaps this is related to World Bank bureaucratic reforms initiated after 2016.

It may be that category A and B projects look different for more reasons than environmental impact. Certainly, policy lending projects are meant to look different.  Nonetheless, the results are at least suggestive. And more evidence for that comes from looking at the share of projects rated each category over time, presented in the figure below. It is very clear that Bank staff and borrowers are not keen to put forward projects that might be rated Category A: projects that involve considerable construction, for example. That’s going to be an issue if the World Bank wants to play a bigger role in creating low-carbon economies in middle income countries.

And the dramatic drop in category B projects in 2020-21 is also revealing: it reflects the World Bank’s efforts to get financing to countries suffering from the global pandemic.  The Bank reports that the average gap between completion of a project concept document and Board approval dropped from 10.6 months in 2019 to 7.8 months in 2021 (at a period during which annual IBRD and IDA commitments climbed from $45 billion to $67 billion). Clearly, World Bank staff and management appear to believe that if you want to get financing delivered fast, don’t trigger safeguards.

The results suggest the Bank should embrace large scale policy lending for climate. It is unlikely to trigger safeguards and is comparatively bureaucracy-free. That will make it more attractive to client countries, but also is likely to have a larger impact. Supporting policy change on issues such as carbon subsidies and pricing will have a larger effect on global emissions than financing the marginal infrastructure investment that may or may not have been low carbon without the World Bank’s financing.  

Still, when it comes to the bureaucracy of environmental review, it is time for a reassessment.  The World Bank Group should meet standards for environmental protection and social safeguards—it has financed some damaging projects with far too little in the way of remediation in the past. But the cost of the existing regime in terms of global climate and development outcomes may be too high. And that involves not just the review process but additional constraints including the ban on finance for nuclear power. If the Bank and other multilateral institutions are to play a greater role in climate finance, reforming their overly-bureaucratic investment approach through greater policy lending and a reformed safeguards regime needs to be part of the package—and that needs shareholder support.

The World Bank Must ‘Walk the Talk’ on Gender Equality

Through the World Bank’s history and thirteen presidencies, not once has the institution been led by a woman.  

Last week, the Biden administration nominated Ajay Banga, former head of Mastercard, as a candidate to be the next World Bank president. I welcome President Biden’s choice, because Banga is an exciting and well-qualified candidate. As with any nominee, I hope the Bank’s shareholders will consider his full set of qualifications, background, and approach to development issues. Should he be elected, I look forward to continuing to work with staff under his leadership to ensure gender equality is prioritized on the Bank’s agenda.   

But it’s unfortunate that the trend in men-dominated leadership at the Bank continues. This is not merely a commentary on one candidacy. There is a shocking lack of women in leadership roles at nearly all international financial institutions. No multilateral development bank has ever had a woman president except one, the European Bank for Reconstruction and Development, when Odile Renaud-Basso broke the trend in 2020. 

This runs contrary to what we know about the value of diversity of perspectives and lived experiences among leaders. This is not just about fairness; compelling evidence confirms the benefits of gender diversity in leadership. And there is no shortage of qualified women candidates to lead multilateral development banks: Ngozi Okonjo Iwaela, Sri Mulyani Indrawati, Samantha Power, Gayle Smith, and Rebecca Grynspan, just to name a few.  

Still, much can be done if and when Banga assumes the presidency. The World Bank needs to elevate gender equality as a priority both within its internal leadership and organizational culture and in its external lending, technical assistance, and other forms of support to governments and private sector. 

Regarding internal leadership, some signs of progress are emerging. Outside of the presidency, nearly half of the World Bank’s senior managers–44 percent–are women, which is second among multilateral development banks that publish data on women’s representation in leadership positions.  

On the other hand, only one quarter of World Bank board members are women, so it’s clear that shareholder governments will need to be called upon to make gender parity in leadership a priority going forward.  

With regard to the Bank’s external lending and support, wider reform efforts under way must make room for gender equality as a key priority. In the face of compounding crises and considerations of channeling World Bank resources to tackle new global challenges, gender equality should not fall off the agenda. In fact, remembering to put it front and center will allow limited resources to stretch that much further. Hana Brixi, the Bank’s Global Director for Gender, is currently leading an update of the institution’s gender strategy; it will be imperative to integrate this effort with those aimed at shifting the institution’s wider mandate, in order to prevent a siloing or deprioritization of gender equality as a key development objective. Part of the gender strategy’s update should focus on ensuring the Bank ‘walks the talk’ through its internal leadership and organizational culture.  

Center for Global Development (CGD) fellows have continuously argued for women’s representation among MDBs’ senior leaders, including at the World Bank. Our  gender equality research program, supported by Co-Impact, is currently investigating the wider trends in women’s advancement both within the World Bank and across international financial institutions. The project seeks to identify the persistent barriers to women in leadership roles, as well as the drivers of progress. The findings of this work, which will conclude at the end of 2023, will be launched at CGD’s flagship Birdsall House Conference on Gender Equality.

The world is facing many challenges, all of which the incoming World Bank president will have to address. From climate change to poverty to health and food crises, women are often disproportionately affected. For example, during the height of the COVID-19 pandemic, women took on three times as much childcare work as men, and women-owned businesses around the world closed at higher rates than businesses owned by men. International institutions and their leadership must begin to treat gender equality not as an afterthought or as a ‘nice to have,’ but as a critical piece of future lending and support.  

Yes, MDB Shareholders Can Act Now: Six Very Feasible Near-Term Decisions

Spurred by the polycrisis and explicit calls from shareholders and other stakeholders, multilateral development banks (MDBs) are considering reforms that will give them the capacity to address country and global challenges, as Secretary Yellen recently put it, “with the urgency and scale that is required.”

The World Bank is in the most visible position as it works on its evolution roadmap. But change is needed across the MDB system to enable these institutions to play a more effective and a much bigger role in helping the world meet these challenges. Together they hold about $500 billion in shareholder equity, which can be leveraged many times over in lending. Collectively they are already the largest external source of public climate-related lending to emerging markets and developing economies (EMDEs). MDB knowledge and expertise accumulated over decades, on-the-ground presence, capacity to help countries integrate climate and development objectives, and array of financial and non-financial instruments are valuable assets, from which the world can and should reap greater returns.

The next year to 18 months are a critical test for MDBs, individually and collectively, and for both shareholders and MDB management. The world will be watching to see if MDBs can transform themselves to meet 21st century challenges. If they cannot, governments may increasingly turn toward bilateral instruments, exacerbating what is already a badly fragmented landscape. Finding the political will to add more capital to MDBs should not be taken for granted, especially if current capital is not better utilized.

The stage has already been set for reforms to use MDB capital more efficiently. The G20 has welcomed the report of the independent panel of experts on MDB capital adequacy frameworks (the CAF report). The report offers a robust case that current MDB capital adequacy policies and capital management exceed the prudential requirements of AAA ratings. The two largest credit rating agencies (CRAs) agree and see potential lending headroom. The report notes that the MDBs as a system could potentially lend hundreds of billions of dollars more if the report’s recommendations were implemented.

The recommendations include strengthening the shareholder role in defining risk tolerance, giving prudent value to MDB callable capital, pursuing financial innovations at scale that add to available capital and free up capital for additional lending, engaging more closely with CRAs on strengthening methodologies, benchmarking MDB CAFs to support stronger shareholder governance, and releasing more data on MDB credit performance to CRAs and private investors to make their risk assessment more accurate. Some of the recommendations serve the dual purpose of expanding MDB lending capacity while also offering SDG finance opportunities to private investors and insurers at scale—at the portfolio level, not just transaction by transaction.

After initial reluctance, the risk and treasury departments of some of these MDBs are beginning to embrace some of these steps. President Malpass of the World Bank recently noted that the bank can lend $6 billion more per year without endangering its AAA rating. That is nearly a 20 percent increase over IBRD’s 2022 lending. And the World Bank is considering additional measures recommended by the report, including recognizing the financial value of callable capital.

This progress is clearly being driven by a resolute shareholder and G20 stance supporting CAF reforms. Without a sustained shareholder push, progress could easily falter. The opportunity to advance momentum at the spring meetings should not be missed. The first step is to develop specific implementation plans, with options for shareholder decisions as needed.

Here are six areas where the Development Committee and the G20 could mandate action. The first three are steps to add to available capital or free up capital to enable more MDB lending that can be scaled over time. The second three are systemic improvements that lay the foundation for more fundamental changes in capital adequacy methodologies, more efficient capital usage, more accurate risk assessment, and better shareholder governance.

Adding to available capital

1. Hybrid capital

The CAF report recommends that MDBs issue hybrid capital instruments that can leverage additional lending. (Hybrid capital instruments generally have long tenors, include coupon payments that can be suspended under defined circumstances, and require purchasers to hold them for some period of time before exiting.) This is a highly scalable means of adding to available capital in ways attractive to shareholders and large-scale institutional investors interested in increasing the SDG shares of their portfolios. CRAs assign considerable equity value to it for commercial firms and have clearly indicated their willingness to do so for MDBs, ensuring the leverage power of hybrid capital issuance.

Such capital would not confer voting rights to asset holders or affect MDB governance. The African Development Bank (AfDB) has already received approval from its board to issue hybrid capital and, in fact, just submitted to the IMF staff a hybrid-capital-based solution for the channeling of SDRs to MDBS that would preserve their reserve asset status based on IMF criteria. The solution developed by the AfDB in collaboration with the Inter-American Development Bank can be used by MDBs to substantially increase their lending capacity. 

Decision: Call on the World Bank and the regional MDBs to develop individual plans to issue hybrid capital and to form a working group to consult on a common hybrid capital design in order to build a scalable asset class. Report back on progress by the annual IMF/World Bank meetings.

2. A donor portfolio guarantee fund for MDB climate change mitigation and adaptation loans

The CAF report explores the benefits of donor portfolio guarantee funds that take risk off MDB balance sheets to free up space for more lending. Funds constructed in this way multiply the power of donor funds through MDB leverage. Such a fund has already been designed in the education sphere. The International Financing Facility for Education (IFFEd) is efficient. It is capitalized by a relatively small amount of paid-in capital from highly rated shareholders, along with additional contingent capital commitments in the event MDB borrower arrears exceed a certain threshold. IFFEd offers portfolio-level guarantees on loans from multiple MDBs (and some grant finance for use in making lending terms concessional for poorer countries.)

This model could be used for climate finance with clearly defined results-measurement criteria to determine the scope of climate-related loans that are eligible (which might also improve results reporting). It is an efficient model with very limited administrative expenses because it would not originate loans or require a governance structure for loan approval. It would simply expand the lending envelope available for borrowing countries’ climate investment priorities. It would be particularly useful for countries that are bumping up against MDB country exposure limits, as the portfolio guarantees would free up space for more lending. It would work well to expand lending headroom for countries with their own well-developed climate strategies and investment plans, such as those defined in Country Climate and Development Reports and Just Energy Transition Plans.

The current architecture for concessional climate finance is highly fragmented and often difficult to access. It requires ongoing donor infusions to sustain or increase flows. Some part of the guarantee funds could, in fact, come from consolidating or drawing funds from existing climate trust funds and climate financial intermediary funds (FIF).

Decision: Key climate donors call on the World Bank and other MDB representatives to work with them to develop a plan for creating a climate donor guarantee fund, with options for size, funding sources, and criteria for loan eligibility. Report on the plan at the annual IMF/World Bank meetings. Individual donors indicate willingness to make contributions to the guarantee fund or to transfer some of their funds from existing climate trust funds or climate FIFs.

3. MIGA insurance

Insurance can also be used to take risk off MDB balance sheets to expand lending headroom. The World Bank Group already includes a strong insurance arm, the Multilateral Investment Guarantee Agency. MIGA has a global mandate and diversified portfolio, political and non-honoring contract risk insurance products, a well-established performance track record, excellent access to private reinsurers (reinsuring more than 60 percent of its portfolio), the ability to take on public and private exposure, and authority to partner with other MDBs as well as the World Bank Group. Currently it works on its own firm-level transactions or with other MDBs on a transaction-by-transaction basis.

As recommended in the CAF report, it is time to move forward with an ambitious plan for MIGA to partner with other MDBs at the portfolio level, freeing up MDB capital for more lending by leveraging off MIGA’s efficient risk transfer platform and ability to diversify risks. The plan could target climate- as well as development-related portfolios.

Decision: Task MIGA to develop a plan for MDB portfolio risk transfers, accessible to multiple MDBs, with options for MIGA exposure size, insurance products included, and MDB lending portfolios eligible. Report on the plan at the annual IMF/World Bank meetings.

More efficiently leveraging existing capital and strengthening capital adequacy information, methodologies, and governance

4. Benchmarking MDB capital adequacy

To make sound decisions about where best to put capital and whether their capital is being used efficiently, shareholders need the ability to review key capital adequacy metrics and concepts, clearly and consistently defined across MDBs. The CAF report recommends that regular capital adequacy benchmarking across MDBs be conducted with a standardized format and with consistent concepts, definitions, and measurement. This should be a shared responsibility of risk and strategy officers.

Remarkably, no such comparative benchmarking is possible at the moment because different MDBs deploy different capital adequacy concepts, ratios, and methodologies. While there may be good reasons for these differences, it is still possible and important to create a common template that translates these differing approaches into harmonized metrics to allow comparisons across MDBs and to make it possible to assess the capital adequacy of the MDB system as a whole. This is especially critical during periods of crisis, such as the current moment, when shareholders will need to make difficult decisions about the size and allocation of new MDB capital, and must justify that taxpayer money is being used as efficiently and impactfully as possible. Regular benchmarking and a more uniform treatment of the different components of capital adequacy across MDBs also can encourage the evolution of the currently highly divergent methodologies used by CRAs to evaluate MDB creditworthiness.

Decision: Instruct MDBs to work together to develop and prepare a common annual benchmark report on capital adequacy. Report on progress at the annual meetings of the IMF and World Bank and issue the first report in early 2024.

5. MDB task force on callable capital

A large part of the shareholder capital subscriptions to many MDB is in the form of callable capital, a shareholder guarantee that holders of MDB bonds will be repaid if the MDB is at risk of insolvency. Callable capital is not the same as paid-in capital, but that guarantee has value, as CRAs recognize and include in their methodologies. It should allow MDBs to take on some additional risk and leverage, while maintaining AAA ratings.

Careful analysis will need to be done in each institution of how best to give value to callable capital in their CAFs, based on their distinct shareholding and operational contexts. Such analyses should offer clear options to shareholders about how callable capital could be included in CAFs, with risks and benefits explained. One obvious first step would be to undertake industry-standard reverse stress tests for each MDB, to give shareholders a clear understanding of the real-world circumstances that could lead to a capital call and evaluate their probabilities.

Although institution-specific, such analyses would benefit greatly from common terms of reference—common concepts and measurement definitions—to permit clear understanding and comparison by shareholders across MDBs. An MDB task force should work together to define these terms of reference. The task force should include representatives from risk, treasury, and operations departments to ensure inclusion of different perspectives. It should jointly engage with CRAs, together with shareholders. The task force could also explore ways to increase transparency on the processes for executing capital calls, including shareholder processes, to reduce uncertainty about how calls would work.

Decision: Call on MDBs to form a task force to agree on common terms of reference for assessing the scope for valuing callable capital in capital adequacy frameworks. Report on progress on the annual meetings of the IMF and World Bank.

6. Global Emerging Markets (GEMs)  

Twenty-four MDBs and development finance institutions contribute to the Global Emerging Markets database. It contains data for over three decades on default probabilities and expected losses for loans to sovereigns and to the private sector. It is one of the world’s largest credit performance databases. And yet only the contributing institutions have access to it. Making more data available would impact the risk weights assigned to MDB portfolios by CRAs, especially for lending to the private sector, and it would enable private investors to better assess the risks of partnering with MDBs and SDG lending generally. Preliminary analyses commissioned by the G20 CAF panel show that the performance of MDB loans is significantly better than loans to the same borrowers by private lenders. The CAF report recommends creating and funding a purpose-built organization to receive GEMs data, ensure its quality and consistency, publicly report statistics and analyses based on the data, and provide appropriately anonymized data to private investors and CRAs.

Decision: Task GEMs member institutions to agree on a plan to establish and fund the new GEMs organization, with commitments by members to regularly supply the organization with data and agreement on data disclosure standards. Report on the plan at the annual meetings of the IMF and World Bank. Publish the first disaggregated GEMs report in early 2024.