Biden to nominate former Mastercard executive Ajay Banga to lead World Bank

President Biden intends to nominate Ajay Banga, the former chief executive officer of Mastercard Inc., to serve as president of the World Bank, moving swiftly to fill a vacancy atop an institution the U.S. is pushing to overhaul.

As the largest shareholder in the World Bank, the U.S. typically selects the leader of the institution, a post that doesn’t require Senate confirmation, though the bank’s board will need to officially appoint Mr. Banga. The board of the World Bank said on Wednesday it would begin accepting nominees before interviewing a shortlist of candidates, with the aim of selecting a new leader by early May. It couldn’t be determined if any other country will submit a nominee. 

If chosen, Mr. Banga would succeed David Malpass, an appointee of former President Donald Trump who announced last week that he would step down from the role on June 30.

"Ajay is uniquely equipped to lead the World Bank at this critical moment in history," Mr. Biden said in a statement. "He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change."

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The Biden administration, primarily through the Treasury Department, has sought to focus the World Bank’s work more directly on addressing climate change. Treasury Secretary Janet Yellen has said the institution could stretch its balance sheet, better mobilize private capital to invest in the developing world and provide more financing directly to localities.

Ms. Yellen’s focus on climate change came as Mr. Malpass faced criticism over his remarks on climate change. He said, "I am not a scientist," when asked at a New York Times event if he believed that human activity contributed to global change. Mr. Malpass, who later said he believed humans were contributing to climate change, will step down before the end of his five-year term in 2024.

Biden administration officials have been quietly discussing potential candidates to succeed Mr. Malpass for weeks, according to people familiar with the matter. Before announcing his decision publicly, Mr. Malpass informed administration officials that he was considering stepping down, some of the people said.

Ms. Yellen has said the World Bank needs to broaden its mission from traditional infrastructure investments focused on poverty prevention and development. She has called on it to focus on long-term threats like climate change and pushed for development banks to expand their lending capacity, including by possibly securitizing project financing. 

"These resources could incentivize the decommissioning of coal plants and protect displaced workers during a clean energy transition," she said this month. "They could enhance health systems to mitigate the spread of disease. Or they could support basic services for refugees and their host communities."

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Ms. Yellen said the new efforts wouldn’t replace the World Bank’s traditional goals of fostering prosperity and fighting poverty but would allow the bank to better address global challenges. 

During a press conference in Bengaluru, India, on Thursday before the announcement of Mr. Banga’s nomination, Ms. Yellen said the U.S. would select a candidate that shared its agenda for the bank.

"We intend to put forward a candidate to lead the World Bank that we think meets the strong, has the strong qualifications necessary to lead the World Bank and will be committed to the kind of reform process that we want to see the bank engaged in," she said.

She also thanked Mr. Malpass for his leadership of the institution. "Under his leadership, the bank has measurably improved the lives of people around the world," she said.

The World Bank has played a major role in the response to Covid-19, providing $157 billion to address the pandemic while also providing $170 billion to address the impact of Russia’s war in Ukraine.

Support for developing countries from Western countries and organizations like the World Bank and International Monetary Fund has in recent years been eclipsed by Chinese entities. China is now the largest bilateral creditor to many developing economies, alarming U.S. officials. 

In talks over restructuring some of those debts, Chinese officials have pushed for the World Bank and other international groups to also take write-downs on the loans they have extended—a demand U.S. officials have opposed. 

Raised in India, Mr. Banga oversaw a more than 13-fold increase in Mastercard’s market capitalization while CEO, expanding the business from a predominantly card-based company to one offering a range of payment technologies. He joined General Atlantic, a private-equity firm, as vice chairman in 2021.

Mr. Banga has cultivated ties to top Democrats, serving on a cybersecurity commission during the Obama administration. Mr. Obama also named him to serve on a committee advising the U.S. trade representative. He has also been an outside adviser to Vice President Kamala Harris, and was among a group of business leaders who advised her on the administration’s work in El Salvador, Guatemala and Honduras.

In a statement Thursday, Ms. Harris praised Mr. Banga and said he would be a transformative president of the World Bank.

In a 2021 conversation with the Council on Foreign Relations, a nonpartisan think tank, Mr. Banga discussed the importance of tackling long-term problems like climate change and combating pandemics. He praised a shift away from fossil fuels. 

He said the recovery from the Covid-19 pandemic needed to focus on "caring about people and planet." Mr. Banga also signed a statement from  advocacy group Climate Power calling on Mr. Biden to be "the ‘climate president’ who led humanity away from the cliff’s edge."

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Following Mr. Malpass’s decision to step down, the U.S. faced pressure from some advocacy groups and World Bank officials to choose a woman to succeed him. Since the World Bank was established in 1944, it has never been led by a woman. The World Bank board on Wednesday said it strongly encouraged women to be nominated for the job. 

"It is definitely time for a woman to lead the World Bank," Svenja Schulze, Germany’s international development minister and a World Bank governor, said in a statement earlier this week.

In the coming weeks, Mr. Biden is expected to announce his nominees for two other key economic positions in his administration: Labor secretary and the vice chair of the Federal Reserve. Labor Secretary Marty Walsh is stepping down in mid-March and Lael Brainard, the former Fed vice chair, started this week in her new role as director of the National Economic Council.

Julie Su, the Labor Department’s deputy secretary, is the leading candidate to succeed Mr. Walsh, according to people familiar with the matter. Asian-American advocacy groups and lawmakers have endorsed Ms. Su for the job, urging Mr. Biden to name his first Asian-American cabinet secretary. Ms. Harris, U.S. Trade Rep. Katherine Tai and Arati Prabhakar, the director of the White House Office of Science and Technology Policy, are all members of the cabinet but aren’t secretaries.

Rep. Judy Chu (D., Calif.), the chairwoman of the Congressional Asian Pacific American Caucus, said she spoke earlier this week with White House chief of staff Jeff Zients to advocate for Ms. Su. She said Mr. Zients didn’t indicate when the president would make a final decision, but said Ms. Su was a serious contender for the job.

"She is eminently qualified to take on this position. It is of enormous importance that AAPIs are recognized in this country as those who should have a seat at the table," Ms. Chu said in an interview, using the acronym for Asian American and Pacific Islander.

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Janice Eberly, a finance professor at Northwestern University, and Karen Dynan, an economist at Harvard University, are under consideration to become the Federal Reserve’s vice chair, according to people familiar with the matter.

Ken Thomas contributed to this article.