S&P Warns of Credit Rating Downgrades for World Bank, Others if US Withdraws
London (Reuters) - S&P Global has joined other major credit rating agencies in expressing concern that an unprecedented US withdrawal from the World Bank and other leading multilateral lenders could jeopardize their prized triple-A credit ratings.
Last week, President Donald Trump issued an Executive Order mandating a six-month review of US support for international intergovernmental organizations. The review will determine whether the US should withdraw from or seek reforms within these institutions.
S&P emphasized that its current triple-A ratings for the World Bank and other top development banks are predicated on the US maintaining its membership. Consequently, any "limiting" of US support could trigger a "negative" rating change.
According to Alexander Ekbom, S&P's top MDB analyst, the impact on the institutions' capital and the potential response from other major shareholders are crucial factors.
"Should the US leave, which would be unprecedented, it is difficult to predict how any reallocation would be handled," Ekbom noted.