EBRD chief calls for development bank shake-up

By Anna Yukhananov

WASHINGTON (Reuters) - The world's multiple regional development banks need to work together better and shake things up or risk becoming irrelevant, the head of the European Bank for Reconstruction and Development (EBRD) said on Wednesday.

Suma Chakrabarti said the creation of the BRICS development bank and a China-led effort to launch the Asian Infrastructure Investment Bank were a criticism of the existing system for not adapting quickly enough to incorporate new power structures and the needs of emerging markets.

China has chafed at its limited voice at other international financial institutions, including the World Bank, International Monetary Fund (IMF) and Asian Development Bank.

The BRICS group as a whole - Brazil, Russia, India, China and South Africa - have also sought a greater say in the international financial order that was created by Western powers after World War Two.

The countries have been frustrated by the slow pace of change within the IMF, where historic reforms agreed in 2010 to give emerging nations a greater say have been held up by the U.S. Congress.

"The unwillingness and inability of existing players to change and adapt quickly to meet shifting demands always leaves the multilateral system playing catch-up," Chakrabarti said on the sidelines of the fall meetings of the IMF and World Bank in Washington.

He called on other regional development banks, including the African Development Bank (AfDB) and the Asian Development Bank, to be more responsive to governments and companies that become frustrated by dealing with often-competing priorities or multiple "country strategies."

"I suspect the vested interests of the different multilaterals makes it difficult to even think about such a nirvana," he said at the Peterson Institute for International Economics think-tank. "I would like, before I finish my career in development, to see if we can at least pilot such an idea."

The EBRD was set up in 1991 to help former communist countries of central and eastern Europe make the transition to market economies, but it has expanded its activities to include central Asia and, most recently, North Africa and the Middle East.

Chakrabarti said the various development banks should collaborate on projects, share knowledge and even combine financing in certain areas.

"Surely, that is how a recipient country would organize the multilateral system if it had its way," he said.

(Reporting by Anna Yukhananov; Editing by Ken Wills)