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Lakshmi Shyam-Sunder, the World Bank's chief risk officer, said the ratings agencies had shown some openness to considering revisions in how they treat callable capital in the banks' balance sheets.

As a next step, Yellen said Treasury had asked the MDBs to prioritize incorporating "a prudent share" of callable capital — the commitment from shareholders to step in in extreme circumstances — into their capital adequacy frameworks.

Treasury official told Reuters that the department is working to develop rules for callable capital so that decisions could be made by April 2024.

Any new proposal on treatment of callable capital will require approval by the shareholders of each of the respective multilateral development banks, bank officials have said.

The bank is also examining other ways to expand lending, including providing more loan guarantees, lending against callable capital that is pledged but not paid-in, and special bonds that can serve as hybrid capital.