On October 9, 2024, at 11:55 PM, a dozen of the largest multilateral development banks could collectively lend another half a trillion dollars before facing a downgrade in their ratings, according to Fitch in a report on Wednesday after reviewing their criteria for assessing supranational institutions. The multilateral lenders listed in Fitch’s report could lend nearly an additional $480 billion before a liquidity crunch would lead to a downgrade if all other factors remain constant, the rating agency said. Multilateral banks are international banks established by multiple countries to develop the economies of low- and middle-income countries. However, Fitch expects the multilateral banks to continue operating within the thresholds of their ratings, meaning Fitch does not expect them to fully utilize the leeway in lending. According to Fitch, the International Bank for Reconstruction and Development, the lending arm of the World Bank Group, could lend an additional $117 billion or 47% of its current lending commitments, with nearly $100 billion additional available for the Asian Development Bank and the European Investment Bank each. The report states that both the Asian Infrastructure Investment Bank and the New Development Bank could more than double their current banking engagements without their cash position falling into the red. The total would increase the banking engagements of the 12 lenders by 37%, according to Fitch. „The MDBs are reviewing their capitalization in response to demands from their shareholders to increase their impact on development,“ the report said. „Fitch expects that the MDBs will respond with some adjustments to capital management while maintaining capital adequacy ratios in line with their high ratings.“ This year, the leaders of 10 MDBs have committed to taking action in five critical areas, including an additional lending capacity of $300 to $400 billion in the next decade.
