The way to think of what’s going down at the World Bank is as a slow-motion stickup in broad daylight. The two lugs who burst in shouting about climate change are Vice President Gore and State Secretary Kerry. The white-haired moll who stuffs the note through the cashier’s window resembles Treasury Secretary Yellen. Then there’s the geezer who’s idling the getaway Corvette. He’s wearing aviator specs and going by the name of “the Big Guy.”

That satire comes to mind in the wake of the resignation of, in David Malpass, the last World Bank president determined to stick to the mandate of Bretton Woods. He’s not due to leave until June. Yet the big Democratic party foghorns are already urging the bank to focus on a radical new issue, undreamed-of when, in 1944, the bank was formed. Its founders couldn’t have imagined it scheming to lend billions against the weather.

The Times, in a rare editorial, says the bank “must” respond. Its leaders “need” to “figure out how to raise and leverage the huge amounts of capital” required amid “a changing climate.” The amounts of money the Biden administration itches to throw at climate change are so great that it’s eyeing the bank’s limits on leveraging its capital. It will come under pressure to relax its exceptionally  — and admirably — conservative rule.

This is known as the gearing ratio, which is one to one, meaning that for every dollar it lends it has to have a dollar in equity or capital. The most notorious attempt to abandon that guardrail was in the closing years of Robert McNamara’s tenure as the bank’s president. He was outmaneuvered by President Reagan. The efforts now to parlay billions in lending against climate strike us as a violation of the spirit and letter of Bretton Woods.

Just to mark the point: The “Bretton Woods Agreements,” signed in 1944, ordain that the “total amount outstanding of guarantees, participations in loans and direct loans” offered by the Bank “shall not be increased at any time,” if that were to mean going above “one hundred percent of the unimpaired subscribed capital, reserves and surplus of the Bank.” In other words, loans cannot exceed the bank’s capital.

There hasn’t yet been, as far as we can tell, an open, official campaign to change the gearing ratio, though the ratio might come up for discussion when the Bank has its spring meeting next week at Washington. There are, Bloomberg reports, other liberalizations of bank lending on the agenda. One idea, it reports, would be to free up an extra $50 billion to as to “allow the institution to take more risk with its existing capital.”

Liberalizing World Bank lending in any fashion, let alone in the middle of a banking crisis, strikes us as one of the most tin-eared ideas ever to come out of Washington. The whole country is learning the importance at banks of, among other things, the ratio of capital to assets. The World Bank was, in its basic charter, restricted to an exceptionally conservative ratio precisely because of the risky nature of lending in the areas in which it operates. 

President Biden’s climate tsar, John Kerry, claims that the climate crisis requires “new thinking and creative vision regarding finance.” The next World Bank president, he avers, “can help put in place new policies that help deploy the large sums of money necessary to reduce global emissions and help developing and vulnerable countries adapt, build resilience, and mitigate the impact of greenhouse gasses.” 

We’ve long been in the skeptical camp on climate change. For the purpose of this editorial, though, let’s stipulate that it’s a legitimate question. All the more reason to heed the constitutional, treaty, and statutory controls over what can be done. Let any strategic plan to expand World Bank lending or loosening its controls be taken to Congress. If it is to be authorized, let it also be correctly appropriated — and that, too, in broad daylight.