Source · Select Committees · International Development Committee
Recommendation 35
35
Accepted
Outline clear plans to reform financial systems hindering investment in low-income, food-insecure countries.
Recommendation
The Government needs to re-double its efforts to reform the financial systems which precipitate the strangling unsustainable debt faced by many food-insecure countries. The Government should state clearly what it intends to do regarding the reform of financial systems that stifle investment in low-income countries. (Recommendation, Paragraph 88)
Government Response Summary
The government agrees to re-double efforts for financial system reform, committing to lead G7 institutional reform, push MDBs on the G20’s Capital Adequacy Framework, offer guarantees for over $6bn in MDB finance, and champion bolder systems for fragile states.
Government Response
Accepted
HM Government
Accepted
Agree. The UK is committed to driving faster reform of the global financial system, working with partners to strengthen the voice of the poorest and most vulnerable and tackle unsustainable debt, and unlocking greater levels of private investment. The UK’s ambition is to lead the G7 on international institutional reform. The UK has already played a leading role in pushing for and implementing reforms. We have used our seat on the boards of the IMF, World Bank and Regional Development Banks (RDBs) to argue for a bolder approach which helps unlock more finance to the poorest and most vulnerable. This includes pushing the MDBs on implementing the G20’s Capital Adequacy Framework (CAF) review and therefore taking on more risk and unlocking more lending from their own resources. Actions undertaken by MDBs have already enabled them to expand lending by over $200bn over the next decade and there is more to do. We are proud of how MDBs have stepped up to the challenge and we are keen to work in partnership to see how we can go further. We have led the way on offering guarantees to Multilateral Development Banks, extending guarantees to unlock more than $6bn of additional finance, including for climate, in African, Asian and Pacific countries. We have also been championing a bolder system to deliver for the poorest and most fragile states and supporting the International Financial Institutions to develop new operating models, tailormade to fragile states’ unique and challenging circumstances. We championed this approach during the last World Bank International Development Association (IDA) replenishment in 2024 and look forward to the upcoming World Bank Fragility Review. We are also pushing to ensure that resources are spent effectively, through strong public financial management systems and promoting fiscal transparency.