S&P Cautions on US Credit if World Bank Support Is Cut

S&P Global has warned that an “unprecedented” withdrawal of the United States from the World Bank and other multilateral lenders could jeopardize their triple-A credit ratings. This comes after President Donald Trump signed an executive order mandating a six-month review of US financial support to international intergovernmental organizations.

Alexander Ekbom, S&P's top multilateral development bank (MDB) analyst, stated that the current triple-A ratings of institutions like the World Bank rely on the assumption of continued US financial backing. A US exit or reduction in support could result in a negative rating adjustment, depending on whether other major shareholders step in to offset the shortfall.

“Should the United States leave, which would be unprecedented, it is difficult to predict how any reallocation would be ironed out,” Ekbom said.

The executive order, signed last week, calls for an evaluation of whether the United States should withdraw from or advocate reforms in global financial institutions. A potential US withdrawal from organizations like the World Bank could undermine their lending capacity and stability, raising concerns among other stakeholders.

S&P’s warning aligns with similar alerts from other major credit rating agencies, emphasizing the uncertainty surrounding US international commitments and their potential impact on global financial stability.