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FEATURE STORY July 17, 2017

From IBRD’s Inaugural Bond to the Pandemic Bond: 70 Years of Connecting Capital Markets to Development


Gene Rotberg, World Bank Treasurer from 1968 to 1987 with current World Bank Treasurer and VP Arunma Oteh

The World Bank


  • Innovation and pioneering new markets is a legacy from our past which we continue to build on today.
  • 70 years ago, on July 15, 1947, IBRD issued its first bond. Since then, the World Bank's history of innovation demonstrates the evolution of capital markets as a force for good.
  • On the anniversary of the inaugural bond issue, IBRD's longest serving Treasurer, Eugene Rotberg reflects on the transformative power of the capital markets.

When it comes to using capital market innovations to support development, the World Bank Treasury stands on the shoulders of the giants who came before us.

From inaugural IBRD bond issued 70 years ago—to the first currency swap in 1981—to last month's launch of the pandemic bond, pioneering innovation is a legacy which we continue to build on today.

Back in 1947, the World Bank needed to look for innovative financing to leverage debt. Demand from clients had outstripped the capital paid in by members. Only the paid-in capital of the United States ($571.5 million) was fully available for lending. The Bank needed to raise additional funding on the bond market—something it had never done before.

"It is hard now to comprehend how difficult it was initially to make investors, regulatory bodies and legislatures understand how essentially sound an institution we are," wrote E. F. Dunstan, the Bank's director of marketing at the time. "Indeed, it was with considerable trepidation that we announced plans for our first bond offering of $250 million in the United States on July 15, 1947, through 1,700 securities dealers. This was the largest consortium of its kind which, up to that time, had ever been organized in this country."

The marketing strategy, which included roadshows, presentations and inviting investors to visit the Bank in Washington, DC for discussions with senior staff and management worked.

The inaugural offering of $250 million on July 15, 1947 was six times oversubscribed (according to the Bank's FY47 Annual Report), with the bonds immediately selling at a premium over the public offering price. 

"Did you know? Back in 1944, at Bretton Woods, it was envisioned that the International Bank for Reconstruction and Development (also known by its nicknames—the "World Bank" and the "International Bank") would function largely through providing bank guarantees as opposed to loans. Soon after IBRD began operations in 1946, however, requests for loans out-weighed requests for guarantees. Under the original Articles of Agreement, paid-in capital by members could only be used for lending purposes with the consent of that particular member. Initially, only the United States provided such consent."



The Story of the First Bond


The Pioneer Treasurer: Gene Rotberg, World Bank VP and Treasurer, 1968-1987. Pictured here in 1986. Credit: World Bank Group Archives.

The World Bank

Perspectives from a former Treasurer

Fast forward to 1968, when Eugene "Gene" Rotberg was appointed as VP and Treasurer shortly after Robert McNamara became the World Bank president. Rotberg—the longest serving World Bank treasurer served in this role until 1987 and is credited not only with managing and investing over $20 billion liquid assets in 20 different currencies, but he also increased borrowing from $500 million to $10 billion a year, due to his emphasis on innovative financing.

It was under Rotberg's leadership that the World Bank entered into its first formal currency swap with IBM in 1981, launching the global derivatives market that has since grown to more than $450 trillion.

We caught up with him at his office in Georgetown recently and he reflected on the early years, his life and times with the Bank and the transformative power of the capital markets today.

During the wide-ranging conversation, Rotberg spoke of his passion and pride in the work of the World Bank Treasury and its contribution to development: He spoke of how mobilizing funding from the capital markets is instrumental in enabling the World Bank to finance projects and programs that support the empowerment of women and girls.

"As I often have said, there'll be a little girl who's yet unborn from Bangladesh who'll one day be the president of the World Bank. She will not know it, but people in the World Bank Treasury [actually] started a process of educating little girls in her country. Although she'll never know their names—as a result of their work, good stuff will happen," he said.

Current World Bank Treasurer, Arunma Oteh reiterated this point, highlighting that the value of capital markets is that when used innovatively and effectively, they can be a powerful force for good.

"Markets can and do act as enablers of socioeconomic development," she said. "Since our first bond transaction in July 1947, we have continued to leverage the capital markets to address key development challenges. Our former Treasurers have left a lasting legacy and they continue to inform our work today.  Currently, the World Bank borrows $50-$60 billion in the capital markets. The range of bonds goes from global bond issuances to innovations such as green bonds. In the last few weeks we witnessed yet another important milestone in the launching of a pandemic bond."

Gene Rotberg: World Bank's Longest Serving Treasurer

We would like to thank Elisa Liberatori-Prati, April Miller, Betsy Ware and the team and the World Bank Group Archives for their guidance and historical expert expertise in researching this article. More on the 70th year anniversary to follow.


Written by: Audrey Mpunzwana, Communications Advisor, World Bank Treasury

Video by: Rita Stankeviciute