Economy

US World Bank nominee Ajay Banga said the lender must do “everything it can” to squeeze more cash from its balance sheet while preserving its gold-plated credit rating, as he set out his credentials on a world tour for a role that involves complex geopolitics.The former Mastercard chief executive’s run at the presidency of the multilateral lender comes as the bank finds itself under sustained criticism for failing to adequately address the scale of the global climate crisis while maintaining its mission to reduce poverty. The bank’s current president, David Malpass, last month resigned from his post almost a year early.Banga said he would seek to attract the private sector to support projects underwritten by the bank, alongside exploring elements of the G20-commissioned report into the so-called “capital adequacy frameworks” of multilateral development lenders such as the World Bank. “The estimates of monetary requirements to deal with these issues from climate change to inequality to pandemics to fragility, are in the trillions,” said Banga.“There is not enough money in the multilateral balance sheet, no matter what we do with the capital adequacy framework, which we must do everything we can with to extract what we can, while preserving our AAA status. But even at the end of that, we are not going to get to those trillions.”The bank made loans, grants, equity investments and guarantees to partner countries and private businesses of $104bn in 2022.The G20-commissioned report, released last summer, said multilateral development banks including the World Bank were potentially being more conservative than they needed to be to maintain their triple-A credit rating from the three big credit rating agencies.Banga insisted maintaining the triple-A rating was a priority. “It’s a very simple thing — if you don’t get the right rating, you don’t get the right low cost of funds, which allows you to be able to do things at the right cost to the receiving countries.”Under his watch, the bank would work with the private sector to share its knowledge about countries, he said. “Multilateral banks can be an amazing way of transferring success about what works well in Indonesia, to what works in Mexico, to what works in Kenya, to what works in another place.”Climate policy experts and developing country officials have privately expressed reservations about Banga’s scant development finance expertise and the shift required for a traditional corporate leader to steer a sprawling bureaucracy run by 25 executive directors who represent 189 member countries.Banga, 63, cited his personal experience of emerging markets in defence of his credentials. “I grew up in India. I lived there. I worked there for the first 14 years of my [corporate] life.”He also sought to allay the concerns of some developing countries that a new focus on climate would come at the expense of other priorities, such as healthcare and education, and might mean less money for the poorest. He viewed climate change and development issues as “intertwined”, he said. “In my trips to Africa . . . at no point did I encounter a conversation that said ‘we don’t care about climate, just give me my health and schools’, because they all are at the receiving end of what’s going on with climate.”

The US dominates the World Bank with a 17 per cent shareholding, followed by Japan, China, Germany, the UK, France, India and Russia. Russia’s Tass news agency has reported that it was consulting “friendly countries” about nominating a rival candidate to challenge the US monopoly over the role since the bank was founded after the second world war.In the face of this, the UK formally endorsed Banga’s candidacy after he met with Chancellor Jeremy Hunt on Thursday. India was among the first countries to express support.Banga was in the Ivory Coast and Kenya this month and will also meet government representatives in the EU, Japan, China and Latin America in the coming weeks. Nominations for the presidency close on March 29, and the bank’s spring meeting will be held in mid-April in Washington. More

The meeting from 11:30 a.m. (0330 GMT) will primarily review and determine the advance and discount rates to be charged by the Federal Reserve banks, the Fed said in a statement.The central bank offered no further details, but the move follows Friday’s collapse of Silicon Valley Bank, was the biggest failure since the 2008 financial crisis. It roiled global markets, walloped banking stocks and left California tech entrepreneurs worrying about how to make payroll. More

BEIJING (Reuters) -China unexpectedly kept its central bank governor and finance minister in their posts at the annual session of the rubber-stamp parliament on Sunday, prioritising continuity as economic challenges loom at home and abroad.President Xi Jinping, who has been installing allies in key roles in a government reshuffle as he begins a third five-year term, broke with convention to retain Yi Gang, 65, as governor of the People’s Bank of China (PBOC) and Liu Kun, 66, as finance minister. Both men have reached the official retirement age of 65.Across the slate of appointments, there were fewer changes than anticipated, with most cabinet ministers keeping their posts. However, further announcements are expected in coming weeks as China implements a reorganisation of its financial regulatory structure and other government bodies. “Opting for continuity in these critical economic roles suggests an emphasis on credibility and stability,” said Mattie Bekink, China director at the Economist Intelligence Corporate Network.”It is also perhaps a tacit acknowledgment of some of the challenges for Beijing at the moment,” she said. “The real challenge for this third Xi administration is whether it will address structural imbalances in China’s economy and undertake reforms necessary to ensure China’s long-term competitiveness.”The government has set a 2023 economic growth target of around 5%, up from 3% last year, which was among the weakest performances in decades.China’s statistics bureau head, Kang Yi, told the parliamentary session on Sunday that China’s economy still contains deep structural “contradictions” and “problems”, according to state media.Chinese policymakers face the challenge of getting the economy back on track after three years of COVID-19 restrictions, weak consumer and business sentiment and increasingly adversarial relations with the West, with many global firms looking to hedge their China exposure.Also on Sunday, China as expected appointed Li Shangfu, who is sanctioned by the United States over the purchase of Russian weapons, as defence minister, and named a slate of four vice premiers, led by Ding Xuexiang, who has long served as Xi’s chief of staff. ‘POSITIVE SIGNAL’The biggest change at the parliament session was the promotion on Saturday of Li Qiang, 63, a longtime Xi confidant, to premier. The former Shanghai Communist Party boss takes a role charged with managing the economy, replacing Li Keqiang, 67, who stepped down after two five-year terms.”The government sent a positive signal to the market by keeping these senior financial experts in the cabinet,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.The U.S.-educated central bank chief Yi, appointed PBOC governor in 2018, had widely been expected to retire after being left off the ruling Communist Party’s Central Committee during the party’s once-in-five-years congress in October.Analysts had anticipated that once Yi and Liu stepped aside, they would be replaced by people with far less international experience. “The U.S. side will be much more comfortable with someone like Yi Gang in charge,” said Alfred Wu, assistant professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore.”It shows China wants to at least have a dialogue with the United States on monetary policy and financial cooperation,” he said. Sources had told Reuters last month that Zhu Hexin, chairman of state-run financial conglomerate CITIC Group Corp, was likely to succeed Yi as head of the central bank.The appointments “indicate that the government put professionalism, management and the art of fine-tuning on the front burner when it comes to picking the central bank governor and finance minister, as positions at the helm of core economic departments need tremendous professional skill,” said Sun Fei, an economist.As expected, Wang Wentao stayed on as commerce minister. Zheng Shanjie, governor and deputy party secretary of Zhejiang province, was approved to take over as head of the National Development and Reform Commission, the powerful state planner.The parliamentary session will end on Monday, with Xi expected to give a speech and Li, the new premier, scheduled to hold a televised media conference afterwards. More

BEIJING (Reuters) – China’s parliament on Sunday approved the cabinet line-up nominated by Premier Li Qiang, who took office on Saturday in a once-in-five years reshuffle. Also during the National People’s Congress (NPC), Xi Jinping was confirmed for a third five-year term as president.Here are other key personnel moves made during the NPC, which closes on Monday.China’s four new vice premiers:Ding Xuexiang, 60, is the first-ranked vice premier who also sits in the ruling Communist Party’s Politburo Standing Committee, China’s top echelon of power. He is a trusted acolyte of Xi, and was Xi’s chief of staff first in 2006 in Shanghai and for the past 10 years in Beijing.He Lifeng, 68, replaces Liu He as the next economic tsar. He is a long-time ally of Xi and was formerly in charge of the National Development and Reform Commission (NDRC), the powerful state planning agency.Zhang Guoqing, 58, has a PhD in economics and spent 20 years working in defence corporations before turning to politics and holding top positions in the provincial-level cities of Chongqing and Tianjin, as well as in Liaoning province. Liu Guozhong, 60, was formerly Communist Party chief of Shaanxi province, where Xi has ancestral roots. China’s five new state councillors, who rank below the vice premiers but above cabinet ministers:Li Shangfu, 65, also becomes the defence minister. He had worked in China’s satellite programme and is under U.S. sanctions over the purchase of combat aircraft and equipment from Russia’s main arms exporter, Rosoboronexport.Wang Xiaohong, 65, also holds the post of public security minister, or police chief. He is considered a close ally of Xi, having worked as a police chief in the city of Fuzhou when Xi was party chief there in the early 1990s.Wu Zhenglong, 58, is secretary-general of the state council and was formerly party chief of Jiangsu province.Shen Yiqin, 63，becomes the highest-ranking woman in China. Observers were surprised when the Communist Party broke with tradition and did not appoint any woman to its 24-member Politburo in October.For the first time in decades there were no female vice premiers as well. Shen, the former party chief of Guizhou province, is the only female state councillor.Qin Gang, 57, is also the foreign minister. The former ambassador to the United States had worked closely with Xi when he was chief protocol officer between 2014 and 2018. The only cabinet-level personnel changes were at the NDRC and the defence ministry. The following cabinet ministers held on to their positions: Yi Gang, 65, unexpectedly stays on as governor of the People’s Bank of China. Yi, appointed as PBOC governor in 2018, had widely been expected to retire after being left off the ruling Communist Party’s Central Committee during the party’s once-in-five-years congress in October.Zheng Shanjie, 61, takes over from He Lifeng as head of the National Development and Reform Commission. Zheng has spent most of his career in his native Fujian province where he had served as director of Fujian Provincial Development and Reform Commission and vice governor of Fujian province.Liu Kun, 66, remains as minister of finance, another surprise since he is past the usual retirement age of 65.Wang Wentao, 58, stays on as minister of commerce. He had served as governor of Heilongjiang province and was once Xi’s colleague in Shanghai.Jin Zhuanglong, 59, stays on as minister of industry and information technology. Wang Zhigang, 65, remains minister of science and technology. Huai Jinpeng, 60, remains minister of education   Pan Yue, 62, remains head of the National Ethnic Affairs CommissionWang Xiaohong, 65, remains minister of public securityChen Yixin, 63, remains minister of state security. Considered a Xi ally, he had worked with Xi when the latter was party chief of Zhejiang province from 2002-2007. Chen was sent to the central city of Wuhan in 2020 to help lead anti-COVID efforts and in recent years led to purge corrupt security and legal officials. Tang Dengjie, 63, remains minister of civil affairsHe Rong, 60, remains minister of justiceWang Xiaoping, 59, remains minister of human resources and social securityWang Guanghua, 59, remains minister of natural resourcesHuang Runqiu, 59, remains minister of ecology and environmentNi Hong, 60, remains minister of housing and urban-rural developmentLi Xiaopeng, 63, remains minister of transportLi Guoying, 63, remains minister of water resourcesTang Renjian, 60, remains minister of agriculture and rural affairsHu Heping, 60, remains minister of culture and tourismMa Xiaowei, 63, remains head of the National Health CommissionPei Jinjia, 59, remains minister of veterans affairsWang Xiangxi, 60, remains minister of emergency managementHou Kai, 60, remains auditor-general of the National Audit Office More

The moves preserve continuity in key economic policymaking roles after Li Qiang, 63, was on Saturday installed as premier, replacing Li Keqiang.Following are comments from economists and analysts.ZHIWEI ZHANG, CHIEF ECONOMIST, PINPOINT ASSET MANAGEMENT”It is a positive surprise to the market. The government sent a positive signal to the market by keeping these senior financial experts in the cabinet. The global economic outlook is challenging. Continuity and stability in the leadership of economic and financial affairs are helpful to boost market confidence.”XU TIANCHEN, ECONOMIST, ECONOMIST INTELLIGENCE UNIT, BEIJING    “Yi’s nomination could provide some reassurance that the PBOC won’t deviate too much from its role as a central bank. That said, the influence from the top leadership on its work will remain large, and the bank is expected to assume greater responsibilities in supporting economic priorities, including the development of advanced technologies and decarbonisation.     “I think it’s reflective of Xi’s preference for technocrats. Yi is a renowned economist and Liu has been a fiscal expert throughout his career so far. Xi will count on these appointments to ensure his visions are executed by capable officials, even if they are not his trusted affiliates and may break the norm on age limits.”ALFRED WU, ASSISTANT PROFESSOR AT LEE KUAN YEW SCHOOL OF PUBLIC POLICY, NATIONAL UNIVERSITY OF SINGAPORE”It shows China wants to at least have a dialogue with the United States on financial cooperation and monetary policy, which is a global thing. The U.S. side will be much more comfortable with someone like Yi Gang in charge.”MATTIE BEKIND, CHINA DIRECTOR, ECONOMIST INTELLIGENCE CORPORATE NETWORK, SHANGHAI    “This comes as a surprise to me. But maybe it shouldn’t. If you look at the unambitious GDP growth target, it prioritises credibility because it will be easily achieved.     “It is also perhaps a tacit acknowledgment of some of the challenges for Beijing at the moment and the reassurance of familiar, experienced leaders might be beneficial.     “So perhaps keeping Yi Gang and Liu Kun on in these consequential positions suggests they are considered safe pairs of hands during a challenging time for China.”  DONG XIMIAO, CHIEF RESEARCHER, MERCHANTS UNION CONSUMER FINANCE COMPANY CO, BEIJING“Yi staying in the position would help in maintaining monetary policy stability and continuity and ensuring financial support for the real economy won’t weaken.”The decision would better implement the State Council institutional reform plan, coordinate and push for reforms of the central bank’s branch organs and ramp up building a modern central bank system.”BRUCE PANG, CHIEF ECONOMIST, JONES LASALLE, HONG KONG”It will help to forge the consistency of China’s monetary and fiscal policies as well as to facilitate the collaboration of macro policies with a more growth-friendly stance.” More

A White House statement said Biden discussed with Newsom an emergency declaration he issued on Friday to ensure California has the full support of the federal government as it responds to the impacts of severe winter weather, including flooding, landslides and mudslides. “The President and the Governor also spoke about Silicon Valley Bank and efforts to address the situation,” the statement said without elaborating. More

PARIS (Reuters) -The French Senate on Saturday night adopted President Emmanuel Macron’s unpopular pension reform plan in the wake of a seventh day of demonstrations that were not as large as authorities had expected.One hundred and ninety-five members of the upper house of the French Parliament voted for the text, whose key measure is raising the retirement age by two years to 64, while 112 voted against.The protests – and rolling strikes that have affected refineries, public transport and garbage collections – aimed to pressure the government to withdraw the pension plan, which it said is essential to ensure the pension system does not run out of money.”After hundreds of hours of discussions, the Senate adopted the pension reform plan. It is a key step to make a reform happen that will guarantee the future of our pension system,” Prime Minister Elisabeth Borne wrote on Twitter.She added she was “totally committed to ensure the text will be definitively adopted in the coming days”.Now that the Senate has adopted the bill, it will be reviewed by a joint committee of lower and upper house lawmakers, probably on Wednesday.If the committee agrees on a text, a final vote in both chambers is likely to take place on Thursday, but the outcome of that still seems uncertain in the lower chamber, the National Assembly, where Macron’s party needs allies’ votes for a majority.If the government fears it won’t have enough votes in the lower house, it is still possible for it to push the text through without a parliamentary vote, via a so-called 49:3 procedure.An additional day of nationwide strikes and protests was planned for Wednesday.FEWER THAN EXPECTED AT SATURDAY’S MARCHESAccording to figures from the interior ministry, 368,000 demonstrators marched through various cities on Saturday. Authorities had expected up to 1 million people to take part. As with the previous protests, Saturday’s events were free of any major scuffles with the police.On Tuesday, 1.28 million people took to the streets, the highest turnout since the start of the protest movement, according to government figures.In a joint statement, the French unions, maintaining a rare show of unity since the protest movement was launched at the end of January, called on the government to organize a “citizens’ consultation” as soon as possible.The unions plan to keep up pressure “and to keep on proving that the vast majority of the population remains determined to say no to the proposed bill,” they said.Opinion polls show a majority of voters oppose Macron’s plan, while a slim majority supports the strike actions.LOWER POWER SUPPLY DUE TO STRIKES”A lot of things can still happen next week,” Marylise Leon, deputy secretary general of the CFDT union, the country’s largest, told Franceinfo radio. “Will the text be voted in the National Assembly? We have to rally. It’s now or never.”A spokesperson for TotalEnergies said that strikes continue in the oil major’s French refineries and depots, while public railway operator SNCF said national and regional services would remain heavily disrupted over the weekend.In Paris, garbage continues to pile up on the streets, with residents seeing a growing presence of rats, according to local media.National power production in France was reduced by 7.1 gigawatts (GW), or 14%, at nuclear, thermal and hydropower plants on Saturday due to the strikes, a CGT union spokesperson told Reuters.Maintenance was also blocked at six French nuclear reactors, including Penly 1, the spokesperson said. More

Talks were scheduled for Saturday to discuss the issues faced by British tech companies affected by the collapse, the ministry said in a statement. The Bank of England on Friday said it was seeking a court order to place SVB UK into an insolvency procedure.”The government recognises that tech sector companies are often not cashflow-positive as they grow, and that they rely on cash on deposits to cover their day to day costs,” the statement said. Advisory firm Rothschild & Co is exploring options for SVB UK as insolvency looms, two people familiar with the discussions told Reuters. More than 250 UK tech firm chief executives signed a letter addressed to Jeremy Hunt, the British chancellor of the exchequer (finance minister), calling for government intervention, a copy seen by Reuters shows.”The recent news about SVB going into insolvency represents an existential threat to the UK tech sector,” the letter said. “This weekend the majority of us as tech founders are running numbers to see if we are potentially technically insolvent.””Most businesses are operating on very fine margins in the current economy and the contagion from the initial insolvencies will be vast and impact the economy far beyond the tech sector,” the letter said.Sky News had reported earlier on Saturday that a British clearing bank, the Bank of London, was considering a rescue bid for the UK arm of SVB.Under insolvency proceedings for banks in Britain, some depositors are eligible for up to 85,000 pounds ($102,000) of compensation for cash held at lenders, or 170,000 pounds for joint accounts.Britain’s Department for Science, Innovation and Technology is also talking to the affected tech firms. A further statement will be issued after the talks on Saturday.Susannah Streeter, head of money and markets at the investment firm Hargreaves Lansdown, said in an emailed note that there would be aftershocks in the tech sector next week. “Urgent talks regarding potential takeovers will be ongoing, with regulators under pressure to negotiate bailouts to avoid further damaging fallout,” Streeter said.The ministry said Britain’s banking system remained strong and resilient. The issues affecting Silicon Valley Bank were specific to it and did not have implications for other banks operating in the UK, the ministry said. More