NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Erik Schatzker, Bloomberg

BlackRock Inc. Chief Executive Officer Larry Fink told global leaders the World Bank and International Monetary Fund are outdated and require a total overhaul if they’re to marshal the trillions of dollars in investment needed to bring sustainability to the developing world.

Specifically, he called for a “rethink” of their role as financiers — instead of lending money themselves to promote development and economic stability, the World Bank and IMF would be more useful in the transition to clean energy as insurers that reduce risk for private investors. Fink commented in prepared remarks to the Venice International Conference on Climate, part of the weekend meetings of the Group of 20 in Italy.

“There is private capital that can be mobilized for the emerging markets, but we need to rethink the way the international financial institutions can support low-carbon investments at scale,” he said of the two organizations established 77 years ago in the waning days of World War II. “We need a financing system that isn’t built around bank balance sheets.”

A representative from the IMF declined to comment and the World Bank didn’t immediately respond to a request for comment.

Photo courtesy of geralt.