John J. McCloy

John McCloy was the second President of the World Bank Group. From 1947 to 1949 McCloy took on the foundational tasks that included: starting up lending operations, strengthening staff, clarifying the respective roles of the Executive Directors and the President, and reinforcing the relationship between the Bank and the United Nations and between the Bank and the United States.

During McCloy's tenure, the Bank started to borrow in the capital market. McCloy realized that the main problem of the Bank's earliest days would not be to find borrowers, but to find lenders offering funding at reasonable rates. McCloy was well known and trusted in financial circles. His election signaled that the Bank was not to be a charitable or a political agency, but was to be a financially sound lending institution, following criteria that were acceptable to Wall Street.

McCloy's term also marked a point where the Bank defined its basic policies and operational procedures, made its first loans for reconstruction and for development, filled out its management team, and doubled its staff in size. Perhaps most important, McCloy settled the issue of the division of responsibilities between the President and the Board of Executive Directors. The establishment of the executive autonomy of the President, the emphasis that investment decisions would be made on economic rather than political grounds, and the close link between the President and the U.S. Executive

Director were important factors in bolstering the confidence of the U.S. securities market.

Eugene R. Black

Eugene Black was the third President of the World Bank Group. From 1949 to 1962, Black led the institution from its tentative beginnings to broad recognition as an important, well-functioning, effective, and profitable development institution. He assembled a growing international staff that brought experience and imagination to tackle the demands of an expanding membership. Lending increased rapidly and covered virtually all sectors relevant to economic progress, including infrastructure, industry, agriculture, and education.

Black spent much time on the task of promoting the credit of the Bank and its access to the U.S. capital market. While gaining the trust of its creditors, the Bank was establishing its reputation in the developing countries as the gatekeeper of the international financial markets. Black came to personify access to those markets and to the people who controlled them. Establishing the Bank's reputation as a financially sound institution with an impeccable credit record was Black's most important achievement.

To identify the appropriate national economic context of project investments, Black put strong emphasis on the need for carefully prepared national development plans. This emphasis on well-informed economic planning led to the Bank's early foray into the field of technical assistance. Technical assistance activities grew in number, as member countries recognized the Bank's expertise in a wide field of economic activity. As the Bank's experience with economic development grew, the limitations inherent in the conventional banking concept became more evident, and the need to broaden the scope of the institution became clear. In response to the changing needs of the membership, two major affiliates were created: IFC and IDA.

The creation of IFC and IDA complemented the original International Bank for Reconstruction and Development, and the Bank could now assist all its members regardless of their income level and capacity for servicing debt. The three affiliates signaled the transformation of the World Bank into a serious development institution.

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