Well, here at home the FDIC is broke, but guess what?
The World Bank is on the verge of going broke, too…
According to the Telegraph (U.K.):
The Bank, whose job it is to support low-income countries, has had to hand out so much cash in the wake of the financial crisis that it faces a shortfall in what it can spare for new projects within 12 months.
“By the middle of next year we will face serious constraints,” said its president Robert Zoellick, as he launched a major campaign to persuade rich nations to pour more money into the Washington-based institution.
He conceded that such a task was likely to be extremely difficult, given the difficulties facing countries in the wake of the developed world’s biggest recession since the Second World War.
Although the Bank has enough cash to fund existing projects and its day-to-day operations, the demands thrown up by the global recession have meant it may need extra capital contributions from rich nations to bolster its balance sheet if it is to satisfy such needs.
Mr Zoellick, speaking at the opening of the IMF and World Bank annual meetings in Istanbul, said the Bank needed a capital increase of $3bn-$5bn, though others suspect the eventual need could be higher still.
The money would be shared between the International Bank for Reconstruction and Development – the key part of the bank, which lends to poor nations – and the International Financial Corporation (IFC), which lends to companies.
The World Bank has pretty much screwed poorer countries with the terms of the largesse they’ve offered in the past, but, nonetheless, it’s still pretty amazing that this oufit would be afraid of running out of cash.
What an economic cesspool we’re in…
By the way, Robert Zoellick is an alumnus of the George W. Bush Administration…
Filed under: World News Tagged: | FDIC, financial crisis, Internaitonal Financial Corporation (IFC), International Bank for Reconstruction and Development, poor countries, recession, Robert Zoellick, Telegraph, World Bank