Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the fiscal impact of using callable capital subscribed by the UK to multi-lateral development banks in order to increase the lending capacity of those banks.

Callable capital is a unique instrument that many International Financial Institutions (IFIs) benefit from. HM Treasury and the Foreign, Commonwealth and Development Office record callable capital as a remote contingent liability within their published annual reports and accounts. These remote contingent liabilities are subject to call only when required and to the extent necessary to meet the obligations of the IFIs on borrowings of funds or guarantees. The equity base of each IFI allows the institutions to meet their financial objectives by absorbing risk out of their own resources and protecting member countries from a possible call on callable capital. No call has ever been made on the IFIs’ callable capital stock to date.