Discourse on the future direction of global economic governance, particularly the role of the US dollar in the international monetary system, is raising critical questions about the foundations of international cooperation and the place of multilateralism in today’s world.
At BNP Paribas’ 2025 Global Official Institutions Conference, panellists examined these questions and looked at the current state of multilateralism. Discussions centred on how the main pillars of international cooperation are evolving, such as strategic alliances, development financing, and private sector involvement, with a focus on the challenges the European Union faces in a complex geopolitical environment.
❝ The international order is undergoing a complete overhaul, faced with a rise in tensions, a reduction of American engagement, an insufficiently united Europe, and multilateral institutions being called into question. This situation calls for a deep debate on the causes of this systemic crisis and on the paths to explore to bring about new forms of cooperation. ❞
Less global cooperation and more economic competition
Dr. Alexandra de Hoop Scheffer, President of the German Marshall Fund, has noticed a global shift towards less cooperation and more economic competition; a trend that is touching all areas, from technology, trade and security to climate change and health, making international cooperation even more challenging.
Countries are seeking strategic autonomy, with China focusing on tech and Europe investing in its industrial base. “Another word for this is derisking; this obviously impacts the capacity for countries to cooperate and creates more friction. These trends existed before, but now they are accelerating, making it more difficult for international powers to manage crises around the world,” Dr. Alexandra de Hoop Scheffer stated. Rather than relying on large multilateral engines to solve global challenges, she has also observed a rise of minilateral organisations, or ad hoc coalitions, and bilateralism.
“Today I think it is vital, as a major American think tank, to help distinguish noise from signal. Let’s look at the deeper trends reshaping politics and society in the US, in Europe, and consider how these trends will redefine self-perception, alliances, and the broader global system,” Dr. Alexandra de Hoop Scheffer added.
When it comes to Europe, Dr. Alexandra de Hoop Scheffer believes the continent “needs to succeed in three critical transitions: energy, digital, and geopolitical. Europe must reduce dependencies while maintaining strong strategic relationships.”
She also advocated for building strategic alliances with other powers that have emerged, stressing the need for creativity and innovation: “The old playbook doesn’t work anymore; multilateral organisations, financial institutions, banks, think tanks, governments, need to work together to be able to respond to future challenges.”
Development finance at a crossroads
Jorge Familiar, Vice President and Treasurer of the World Bank, emphasised that when there is more cooperation and less confrontation, there is more prosperity, growth, wellbeing, and poverty reduction. This, he believes, is where multilateral institutions like the World Bank find their purpose. In his view, the World Bank is one of the most efficient private capital mobilisation engines ever created: “If you think about IBRD, our paid-in capital is USD20 billion, and with that, we have gone to the markets and raised USD1 trillion, enabling us to provide USD830 billion in loans which have generated significant development impact throughout world.”
Jorge Familiar stressed the need for more spaces to reach agreements, help the world move forward, and navigate complex situations: “The World Bank has been strengthening its financial capacity to meet these challenges, focusing heavily on job creation, infrastructure, health, education. Energy is also a priority.”
To bridge the funding gap, the World Bank is exploring new financial models such as moving from an “originate to hold” to an “originate to distribute” model for development finance. This approach aims to securitise loans, attract private sector investments, and increase balance sheet velocity to provide even greater support for economies.
“The World Bank adds the most value when no one else is willing to come in to support a project such as during the construction phase where there are higher levels of risk and long financial exposure,” Jorge Familiar explained. Creating distribution platforms and the right instruments can streamline investments, moving from project-by-project discussions to comprehensive pipelines. “We can help countries prioritise these pipelines and make their projects bankable, so that at some point we’ll see multilaterals working with multilaterals, then multilaterals with the private sector, and ultimately the private sector directly financing more projects in middle- and lower-income countries.”
Hear more from Jorge Familiar in the interview video below.
Monica Hanson (Head of Official Institutions Coverage Americas at BNP Paribas): Jorge, first and foremost, thank you so much for coming. It’s a pleasure to have you at the 2025 version of the Global Official Institutions Conference. In the morning and part of the afternoon, we talked about how to deal with the global economic environment in a period of uncertainty, unpredictability. In that context, and really with a view into development finance, it would be very interesting to hear your thoughts in the context of the key priorities, whether they’re constant or evolving, within development finance, and how is the World Bank addressing some of these global challenges?
Jorge Familiar (Vice President and Treasurer of the World Bank): Monica, first, thank you so much for the invitation, and I’m really pleased to be here. And yes, indeed, the world has become more complex. We see a world more fragmented, countries facing economic challenges, in many cases, instances of high debt. In many places, we also see rising conflict and violence. The challenges are significant. Fiscal firepower is limited all around, both from the perspective of donors and from the perspective of developing and emerging countries, and multilaterals like the World Bank are called to play a very important role in supporting the world in such an environment. Right now, we are focusing heavily on jobs. Our mission, as you know, is poverty reduction, and there are a few ways as effective to reduce poverty than job creation. So a focus on infrastructure, on health, on education, on making sure that we support countries in creating the enabling environment for the private sector to thrive and to create opportunities. Just to give you an idea, in the next 10 years, 1.2 billion kids will join the workforce, and if we don’t do something, hundreds of millions might not have access to the jobs that they will need.
Question: How is the World Bank collaborating to increase access to reliable, affordable and sustainable energy?
Monica Hanson: A couple of weeks ago, there was an announcement around not a change, but a progression, if you will, around your global energy financing strategy. It will be interesting to hear from you first what those evolving parameters are and perhaps the implications of that into financing.
Jorge Familiar: I was talking about jobs, but access to energy is fundamental for development as well and for the creation of opportunities. We are co-leading, together with the African Development Bank, a major initiative. It’s called Mission 300, and the objective is to link 300 million people in Africa to energy. We see this as an incredibly important element for development in a region where we see more and more a concentration of extreme poverty. Success will require public and private interventions. You need to have the enabling environment to foster investment, and you also need to have, you know, support from the private sector to go and catalyse these investments. The gap on the infrastructure space is huge. What is needed in terms of investment and what is available in terms of multilateral resources is not enough. So another area where we’re working quite intensely as of late, is the creation of infrastructure in emerging markets and developing markets as an asset class. So one of the things that we would like to do is to take loans originated by us, package them, give them the necessary guarantees, a rating and push them out to the market in order to mobilise private sector resources into infrastructure.
Monica Hanson: In many ways, you’re addressing aspects of potential creation of volatility in the future, but with the dampening of that volatility risk, in some ways, addressing the dynamic of jobs, the dynamic of energy needs, and really linking that up with how do we finance and fund and in partnership with the private sector, which is quite ambitious, doable, right? But again, quite ambitious. There’s a lot of work for us to do together.
Question: How is the World Bank driving innovative financial solutions towards sustainable development?
Monica Hanson: Innovation has been one of the key characteristics of the World Bank. You are a financial innovator around development finance. You’re always trying to think about what the next frontier is. So as we think about elements of what you discuss, but thinking about broader even, what do you think are some of the interesting, call it, frontier products or technology that is in the works in the World Bank that we should expect to see in the future?
Jorge Familiar: Innovation is something that goes well with our capital market activities. First, our brand and our area of work, which is development, which is very much appreciated all around the world. Our AAA and a long-standing tradition of activity in financial markets. That’s a good playing field for development. We always try to take advantage of our very large funding programme to further our development mission. We created the very first labelled bond in 2008, it was a green bond at the time, today our bonds are labelled sustainable, and then, you know, what we are doing lately is outcome bonds. So these are interesting structures in which the principal of a bond comes and funds the World Bank, but the coupon goes to fund another development project, and the payout to investors depends on the success of that project. Another recent innovation: debt for development swaps. These have been around, but we created a decision-making framework that helps us determine when these instruments are appropriate, and the other issue is we guarantee that the funds and the savings that are generated through the swap go to the development objectives that are desired, and we ensure that through supervision of a related World Bank project, maximising the resources to actually go to benefit the people most in need. And then, this idea about securitisation of our assets would be another one to add to the innovation.
Monica Hanson: So listen, exciting time in the future, and it’s really going to be a privilege for us to be a partner to you as you seek to implement some of these solutions. I think creativity counts, but I think the focus on your strategy and your ambition is incredibly important to sustain that leadership, and again, we’re excited to see where the World Bank takes us all.
The private sector awaits a new equilibrium
Philipp Hildebrand, Vice Chairman & Member of the Global Executive Committee at BlackRock, underscored the uncertainty in today’s environment, emphasising the need to find a new equilibrium: “Being in this intermediate space is uncomfortable. As an investor, you need an anchor to focus on long-term perspectives and not get caught up in the noise.”
Philipp Hildebrand anticipates a future marked by higher rates and increased costs, driven by factors such as AI investment and global capital flow complications. Debt levels are also a major concern for global investors. While the world had been experiencing permanent disinflation for decades, he noted that it now faces a structural inflationary bias, which could contribute to higher volatility and weaker growth.
Despite speculation around the US dollar, Philipp Hildebrand highlighted: “around 90% of foreign exchange transactions have the dollar on one side. The dominance of the US dollar is in place and will be with us for some time to come.” He does not expect clients to move away from the US dollar anytime soon; however, he is seeing marginal interest in reducing exposure in institutional portfolios.
For Europe to emerge as a viable alternative, Philipp Hildebrand emphasised the need for a unified financial infrastructure: “We should focus on what can we do to create optimal conditions. It will take time, but this could be a historical moment for European integration, similar to the launch of the euro. It could lead us to a different world, but how different it will be will largely depend on Europe developing a safe and deep liquid asset pool.”
Europe’s strategic repositioning
Arancha González, Dean of the Paris School of International Affairs at Sciences Po, reflected on the European Union’s evolving role in the current geopolitical landscape. For her, this moment is like no other before: “Europe finds itself swimming against the current, striving to pull its sovereignty together. We’ve got to start moving, showing that progress is being made, spend more, better, and together.”
She argued that the European Union has the institutional legitimacy and economic capacity to lead a reformed multilateral order. This requires closer coordination between Member States and a unified cross-country approach. “We need to integrate more, it’s doable. We have a roadmap but now we have to walk this talk,” she added.
Arancha González emphasised that political capital will not be built overnight and called for robust proposals at a European level to support Member States in this progress.
Reflecting on the path forward, Arancha González encouraged: “We need to offer our citizens a positive view of the future. What we need to promise is not a great past, but an amazing future.”
Hear more from Arancha González and Dr. Alexandra de Hoop Scheffer in the interview video below.
Question: What role can the European Union play in strengthening multilateral cooperation?
Arancha González (Dean of the Paris School of International Affairs at Sciences Po): So at a time of fragmentation, at a time of zero-sum game mentality, I think it is very important for Europe to continue to talk about international cooperation as being a win-win, as being necessary in order to manage challenges that have an impact on everybody, and where a zero-sum mentality just simply does not work — whether it’s climate change, whether it’s financial stability, whether it’s fighting against pandemics, or whether it’s ending extreme poverty. You need to think that there is a positive-sum game.
Question: The German Marshall Fund was set up to strengthen transatlantic cooperation, how has its role changed over the years?
Dr. Alexandra de Hoop Scheffer (President of the German Marshall Fund): The role of the German Marshall Fund has constantly changed because the transatlantic relationship has changed as well. I joined GMF more than 12 years ago. It’s been a non-stop reinvention of our organisation because we need to adapt to a changing transatlantic alliance, but also to a changing global order.
Question: What challenges must Europe overcome to strengthen its central role in a redefined multilateralism?
Arancha González: If Europe wants to play a role in this redefined multipolar world, Europe is going to need three big ingredients. First, unity. If Europe is divided, if it’s each Member State pulling in one direction, Europe loses its strength. Second is consistency. In a world where Europe wants to project not only its interests, but also some form of values, applying those values in different ways, being subject to double standards is not good for Europe. Third, Europe needs to put its money where its mouth is. So it’s not only good to talk about the importance of international cooperation. Europe needs to put also, behind its efforts, the financial needs, the political capital to make it work.
Question: How is international cooperation currently shifting and what opportunities for new players lie ahead?
Dr. Alexandra de Hoop Scheffer: I think we have entered an era of increasing competition and less cooperation. And you see how this is affecting multilateral organisations, the capacity of many countries in the world to cooperate and to address global challenges collectively. You see that in the US-European relationship, but all of that is also fuelled in the broader strategic competition between the United States and China, which has many ramifications across the world and across alliances.
Question: How can Europe attract and channel greater investment?
Arancha González: If Europe wants to attract and channel more investments, Europe needs to unite. Fragmented markets don’t attract capital, and we know this full well in Europe. We are rich in capital, but this capital doesn’t stay in Europe. It goes to the US, a market that is deeper, remunerates better. So the road is pretty simple. We need to defragment European markets. We need to do a capital markets union. We need to do a savings and investment union so that the savings, this funding, this capital that Europe has stays in Europe and can help capitalise investments in the big transitions we have ahead of us — whether it’s technology, artificial intelligence, whether it’s climate change, or the growing needs to improve our capacity to defend ourselves.
