In a recent report, credit rating agency Moody's has cautioned that reducing U.S. support for top multilateral lenders, including the World Bank, could jeopardize their triple-A ratings. Although President Donald Trump's administration signed an order to review U.S. support to international intergovernmental organizations, the likelihood of a substantial cut in funding appears low.
The U.S. plays a significant role as a major shareholder in various multilateral development banks; hence, a significant reduction in its commitment would have negative credit implications, Moody's noted. For instance, the U.S. holds a 16.4% share in the International Bank for Reconstruction and Development (IBRD) and a 19% stake in the International Development Association (IDA) of the World Bank Group.
Moody's also highlighted the U.S.'s ownership stakes in other regional development banks such as the Inter-American Development Bank, the Asian Development Bank, and the European Bank for Reconstruction and Development. The ongoing U.S. review of its support to these institutions is expected to last approximately six months, and a withdrawal process would need to be done in an organized manner.
Despite these considerations, Moody's deems it improbable that the U.S. would enact significant changes to its participation in key multilateral development banks, citing reasons such as influence over lending policies and financial commitments' long-term implications. Additionally, a substantial U.S. withdrawal might create opportunities for other countries like China to increase their influence in these institutions, contrary to U.S. strategic interests.