The reform of international financial institutions (IFI) is moving at a ‘business as usual’ pace. The agility of IFIs, however, must be improved to respond swiftly during crises. IFIs will need to perform better in bridging the Sustainable Development Goals (SDGs) financing gap and ensuring greater economic resilience of least developed countries (LDCs) as well as developing economies that struggle to mobilise funding for expediting digital and green transitions. This Policy Brief suggests a multi-pronged strategy for the G20 in expediting the reform of IFIs so they can better deal with emerging challenges, including climate change and digital divide. These recommendations should also help IFIs decouple lending decisions from sovereign ratings, pursue innovative financing tools, and strengthen private capital mobilisation. IFIs should boost their regional coverage to expand cross-border and regional infrastructure financing.
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