WASHINGTON (Reuters) – The Trump administration has notified World Bank shareholders that President Donald Trump intends to pick senior Treasury Department official David Malpass as the U.S. nominee to lead the development lender, people familiar with the decision said on Monday.
The nomination of Malpass would put a Trump loyalist and a sceptic of multilateral institutions in line to lead the world’s largest development lender. Politico, which first reported the decision, said it would be announced on Wednesday, citing unidentified administration officials.
A White House spokeswoman declined comment, and a spokesman for the U.S. Treasury did not respond to queries about the decision.
A European diplomatic source said the Trump administration had notified several capitals of the Malpass nomination, adding that European shareholders of the bank were not likely to block it.
Malpass or any other U.S. nominee would still need to win approval from the World Bank’s 12-member executive board. While the United States controls the largest share of board voting power and has traditionally chosen the World Bank’s leader, challengers could emerge.
If approved, Malpass, the U.S. Treasury’s top diplomat as undersecretary for international affairs, would replace Jim Yong Kim in the role. Kim stepped down on Feb. 1 to join private equity fund Global Infrastructure Partners, more than three years before his term ended, amid differences with the Trump administration over climate change and development resources.
Malpass in 2017 criticized the World Bank, the International Monetary Fund and other multilateral institutions for growing larger, more “intrusive” and “entrenched.”
Over the past two years, Malpass has also pushed for the World Bank to halt lending to China, which he says is too wealthy for such aid, especially when Beijing has subjected some developing countries including Sri Lanka and Pakistan to crushing debt loads with its “Belt and Road” infrastructure development program. China is the World Bank’s third largest shareholder after Japan.
But last year, Malpass helped negotiate a package of World Bank lending reforms tied to a $13 billion capital increase that aimed to limit the bank’s lending and focus resources more on poorer countries. The reforms seek to “graduate” countries to private-sector lending and limit World Bank staff salary growth.
Malpass, 62, was an economic adviser to Trump during his 2016 election campaign. He served as chief economist at Bear Stearns and Co prior to its 2008 collapse and served at the Treasury and State Departments under Presidents Ronald Reagan and George H.W. Bush.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.