Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. Ajay Banga, President Joe Biden’s pick to lead the World Bank, just completed a grueling, global “listening tour” across four continents, flying 39,546 miles to meet with 37 governments. It paid off in the eyes of the U.S.: He emerged without any country announcing a competing candidate and, according to a Treasury official, he has the support of more than 50 percent of the World Bank’s voting share. The bank’s board is expected to sign off on his presidency in the coming weeks. Now, as they say, comes the hard part. Treasury Secretary Janet Yellen has sketched out an ambitious revamp of the World Bank and similar institutions. She wants them to tap more private money and to think bigger than traditional country-specific assistance when it comes to addressing global problems like climate change. Next week’s convening of the IMF-World Bank spring meetings in Washington will mark an important step forward as Yellen tries to put her stamp on international organizations that try to boost global prosperity via support for developing countries. Banga will have a packed schedule here next week as he continues to get to know leaders from around the world. “Everything seems greased for [Banga] becoming the next president,” said Mark Sobel, U.S. chairman at the Official Monetary and Financial Institutions Forum. “But there are these questions about whether the World Bank can use its balance sheet more proactively and creatively to lend more, including for climate.” He’ll kick things off today at a Center for Global Development event, where he’ll talk about the future of the World Bank. MM has a first look at what Banga will say. “It must pursue both climate adaptation and mitigation, it must reach out to lower-income countries without turning its back on middle-income countries, it must think globally but recognize national and regional needs,” he said in prepared remarks. “The task is great.” Banga, the former CEO of Mastercard, will go on to argue Wednesday that “even with governments, other multilateral development banks and philanthropies all working together we will still fall short.” “We need the private sector to come in,” he said. The global economic outlook makes Banga’s task especially daunting. Outgoing World Bank President David Malpass at an Atlantic Council event Tuesday described a “reversal in development” in recent years, with rising poverty and worsening literacy problems. The world suffered a “double whammy” from Covid-19 and then higher prices triggered by Russia’s invasion of Ukraine, plus rising interest rates that are rippling around the world and new turmoil in the banking system. Malpass argues that the world is suffering from stagflation, with stubbornly high inflation and low growth. “If you look at things today, the challenge is that there may not be progress,” he said. “We need to avoid that lost decade.” Happy Wednesday — What’s on your agenda for the IMF-World Bank spring meetings? Want to catch up? Let us know: Zach Warmbrodt, Sam Sutton.
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