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Frequently Asked Questions on GCI
What is ADB's capital structure? As of 30 September 2008, ADB's authorized capital was $55.2 billion, of which $51.3 billion was callable and the remaining $3.9 billion is paid-in. The callable capital is called upon only when required to meet ADB's obligations on borrowings and guarantees. This would happen only in the event that ADB was unable to service these obligations from other sources. Callable capital is mainly used to back ADB's borrowings in the capital markets. ADB's financial operations are conducted in such a manner that the risk of this capital ever being called is minimal. How does ADB's capitalization compare with other multilateral development banks? Multilateral development banks differ in their levels of capital, balance sheet size, and scale of operations. However. ADB's capitalization relative to its lending level is the lowest among its peers (AfDB, IADB, EBRD), both historically and in future projections. For example, ADB's capital base is half of IADB's, yet its annual lending is about 70% of the latter's. When does ADB increase its capital? ADB, like other multilateral development banks, has statutory limits in its Charter, market-related constraints, and guidelines that ensure prudence and financial safeguards in its operations. These controls set the limits on the level of lending and borrowing operations. A GCI is necessary before these limits are reached to continue its planned level of operations. How will GCI affect the relative voting shares of member countries? A GCI does not normally change the relative shareholdings of ADB's members. But members can adjust their shareholdings through special capital increases. This is usually a complex and lengthy process that is conducted separately from GCI. How does ADB add value to the development process in Asia and Pacific? ADB is a trusted, tested, region-based development partner for its ordinary capital resources (OCR) borrowers and stakeholders. It powerfully leverages financial support and expertly delivers technical assistance tailored to the region's development needs and individual national capabilities. Strategy 2020 has redirected ADB's operations to match its unique role and strengths to crucial tasks ahead. The recent financial crisis has strengthened this close alignment. Under Strategy 2020, ADB can help its OCR borrowers to overcome their immediate development challenges while steadily advancing their overall development status. |
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