US Treasury Secretary Jack Lew (left) shakes hands with Japanese Finance Minister and Deputy Prime Minister Taro Aso prior to a bilateral meeting during the IMF-World Bank 2015 Annual Spring Meetings in Washington on Thursday.

Reuters/Washington

The US and Japan want the World Bank and Asian Development Bank (ADB) to team up with a new Chinese-led development bank in syndicated loans, as a way of helping the new lender establish strong standards, Japan’s finance minister said.
Washington and Tokyo are leading members of the World Bank and ADB, respectively, and have been wary of joining China’s new Asian Infrastructure Investment Bank (AIIB), with US officials in particular voicing concern over its lending standards.
Japanese Finance Minister Taro Aso said he and US Treasury Secretary Jack Lew had agreed at a meeting in Washington that syndicated loans involving AIIB and established multilateral lenders would help it meet global standards on governance, debt sustainability and considerations for the environment.
“We discussed that one way to help the AIIB heighten such standards would be for it to extend syndicated loans with institutions that already meet high standards such as the World Bank and the Asian Development Bank,” Aso told reporters.
The meeting was held on the sidelines of the Group of 20 finance leaders’ two-day gathering that kicked off on Thursday.
Aso said the G20 finance leaders had not touched on the AIIB at their first-day session on the global economy.
Washington and Tokyo have given the AIIB a chilly reception, warning that it has yet to embrace the standards established over the last 70 years by the world’s big development organisations such as the World Bank.
However, Washington’s warnings failed to stop its major European allies – Britain, France and Germany – from pledging to join the new bank. Japan says it remains cautious of joining the bank unless Beijing enhances governance and transparency.  
Meanwhile,  Russia’s central bank governor said on Thursday, following a meeting of the bank’s representatives, that the Asian Infrastructure Investment Bank will not replace the development bank for the Brics bloc of large emerging economies.
Russian Finance Minister Anton Siluanov also said the representatives from Brazil, Russia, India, China and South Africa had reached agreement on launching the bank ahead of their leaders’ summit in July.
The expanding membership of the China-led Asian Infrastructure Investment Bank prompted speculation the new initiative will take the wind out of the sails of the Brics development bank, which also aims at funding infrastructure and has been slow in reaching agreement on money and management.
“These are not alternatives; they rather complement each other,” Russian central bank governor Elvira Nabiullina told reporters when asked about the AIIB.
“I don’t think there’s less energy (around the Brics bank), we didn’t feel that. To the contrary, all the representatives of all the countries ... were very motivated to reach speedy practical results.”
Brazil also has seen progress on the Brics bank and views its launch as a priority for the bloc.
Siluanov said the Brics countries were launching the bank before July, which required ratification from each country. Russia has already ratified it, and is expected to commit $2bn to the fund. India will appoint the president of the Brics bank, and a Russian representative will chair the board of governors.
When asked who will represent Russia, Siluanov said: “He’s standing before you.”