BRUSSELS, Feb 23 (Reuters Breakingviews) - American soft power has officially entered its climate finance era. U.S. President Joe Biden on Thursday nominated Ajay Banga to be the World Bank’s next president, replacing David Malpass, who announced last week he would step down a year ahead of schedule. It’s a strong signal that the United States wants to help developing countries switch to greener forms of energy.
Both Banga and Malpass spent time at big banks, but that’s where the similarities end. Malpass was chief economist at Bear Stearns until it almost failed during the 2008 financial crisis. His likely successor spent 15 years at Citigroup (C.N), rising to lead the too-big-to-fail behemoth’s Asian operations, before taking charge of Mastercard (MA.N).
While Malpass expressed scepticism about global warming, Banga is a bona fide climate financier. A naturalized U.S. citizen raised in India, he has extensive experience of lending in the developing world and of advocating for equity and the environment. That’s a potent combination for an institution whose model U.S. Treasury Secretary Janet Yellen recently declared to be “insufficient to meet the moment”.
As the World Bank’s biggest donor, the United States has traditionally installed government careerists who used the post to promote Cold War-era priorities. By choosing a banker who cares about the planet, Washington is signalling that green finance is a political priority. (By Rebecca Christie)
Follow @Breakingviews on Twitter
Capital Calls - More concise insights on global finance:
Blackstone and Bumble are still a fitting match read more
Wood Group has grounds to face down Apollo read more
Miners’ bets on the future of coal are diverging read more
Beijing mutes ChatGPT meme rally read more
Amazon delivers a regulatory breather to Big Tech read more
