IBRD Callable Capital - Executive Summary - Reverse stress test and shareholder response

Jul 19, 2026

The report explains the process and governance of IBRD callable capital, detailing scenarios that could lead to a capital call, when and how such a call may be made, and how shareholders would respond. Callable capital may be called only to meet bond and guarantee obligations under the Articles of Agreement’s “waterfall” approach. It also presents reverse stress test scenarios, emphasizing their extreme remoteness, and summarizes how shareholder commitments function as legally binding contingent liabilities with varying requirements for parliamentary approvals.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages121

Reading Time5 h 5 min

Introduction

Legal and Governance Framework

Reverse Stress Test Analysis

Shareholder Process for Responding to a Call

Conclusion

Annex 1. IBRD Shareholder Capital Subscriptions

Annex 2. Individual Shareholder Responses

Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized IBRD Callable Capital © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 [Internet: www.worldbank.org](Internet: www.worldbank.org) This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522- 2625; e-mail: [pubrights@worldbank.org](pubrights@worldbank.org). Design: Sarah Jene Hollis, GCS, World Bank Group Cover Photo: World Bank / Simone D. McCourtie Contents 1 Introduction 1 2 Legal and Governance Framework 3 3 Reverse Stress Test Analysis 7 4 Shareholder Process for Responding to a Call 11 5 Conclusion 13 Annex 1. IBRD Shareholder Capital Subscriptions 21 Annex 2. Individual Shareholder Responses 27 United States 27 Japan 34 Germany 37 United Kingdom 40 India 45 Canada 48 Italy 53 Spain 59 Netherlands 63 Korea, Republic of 67 Switzerland 70 Belgium 74 Australia 77 Poland 83 Denmark 85 Austria 88 Norway 91 Chile 94 New Zealand 97 Czechia 102 Slovak Republic 106 Lithuania 109 Latvia 112 Tables Table 1: Reverse Stress Test Illustrative Scenarios 7 Table 2: Overview of Shareholder Process 14 Figures Figure 1: Illustration of How a Large Non-accrual could Potentially Lead to a Call on Capital 8 Acronyms and Abbreviations CAF Capital Adequacy Framework E/L Equity-to-Loan Ratio FY Fiscal Year IBRD International Bank for Reconstruction and Development LLP Loan Loss Provisioning MDB Multilateral Development Bank MOF Ministry of Finance PCT Preferred Creditor Treatment iv IBRD Callable Capital Executive Summary Callable capital has been an integral part of IBRD’s capital structure and a foundational element in IBRD’s capital adequacy framework. This report seeks to provide increased clarity on the process and governance surrounding IBRD’s callable capital, including clarification on scenarios that could lead to a call, when callable capital can be called, how a call could be made, and how shareholders could respond to a call. IBRD’s callable capital can only be called to meet bond and guarantee obligations. The Executive Directors are authorized to call capital by a majority of the total voting power. IBRD’s Articles of Agreement set forth a clear “waterfall” for calling capital where IBRD’s special reserve, surplus, and the income earned on its paid-in capital and retained earnings would be ap

FAQs

What is IBRD callable capital used for?

IBRD callable capital can only be called to meet bond and guarantee obligations.

Under what authority and mechanism can IBRD call callable capital?

Executive Directors may call capital by a majority of total voting power, following the Articles of Agreement “waterfall” that prioritizes reserves, surplus, and income from paid-in capital and retained earnings.

How do reverse stress test results affect the likelihood of a capital call?

The reverse stress test highlights scenarios that could trigger a capital call, while emphasizing their extreme remote nature and the low probability intended by IBRD’s capital adequacy framework.

Jul 19, 2026

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