China’s AIIB development bank is ‘constructive addition’ to world’s lenders -- US Treasury official

PUBLISHED : Thursday, 28 April, 2016, 4:55am
UPDATED : Thursday, 28 April, 2016, 4:55am

The US Treasury’s top international official said on Wednesday he believes China’s new development bank can be a “constructive addition” to the world’s multilateral lenders if it follows best practices and institutes proper safeguards.

But Nathan Sheets, Treasury undersecretary for international affairs, said the United States is not presently considering an investment in the new Beijing-based Asian Infrastructure Bank.

Sheets told a US House Financial Services subcommittee meeting the Treasury would need to see a positive track record from AIIB before considering such an investment, a decision that is likely “quite a ways down the road I think.”

The AIIB can help establish a positive track record through co-financing deals with other development banks, such as the World Bank and the Asian Development Bank.

“There is certainly a marked infrastructure need in Asia,” Sheets said. “To the extent that it is implementing those projects in a way that is consistent with best practices and is safe and responsible, it can be a constructive addition,” Sheets said of the AIIB.

Sheets also said Greece would not have access to the International Monetary Fund’s exceptional lending facilities in the next phase of its bailout without making the country’s debt sustainable.

The Treasury, which effectively controls the IMF’s biggest voting bloc, supports the IMF’s calls for “a solid programme” that will achieve its objectives and will be executed by Greece. Sheets also said the IMF wants “debt relief to ensure that the debt is sustainable” for Greece.