Delegates from 44 countries met at Bretton Woods to design new rules and institutions for postwar finance. One key institution was the International Bank for Reconstruction and Development (IBRD), intended to help rebuild economies damaged by World War II and support longer-run development through lending and guarantees.
The IBRD’s founding treaty (its Articles of Agreement) became legally effective, allowing the institution to begin functioning as an international lender. This step turned Bretton Woods plans into an operating organization with member governments, subscribed capital, and defined rules for lending and governance.
The World Bank (IBRD) officially opened for business in Washington, D.C., and began building staff and procedures for lending. Early work focused on setting policies, reviewing requests, and figuring out how to raise funds for loans in private capital markets.
Eugene Meyer, the World Bank’s first president, resigned after about six months. His departure highlighted internal challenges as the new institution tried to move from planning to making loans and building credibility with investors and member governments.
John J. McCloy became the World Bank’s second president and pushed the institution toward active operations. His priorities included strengthening management, clarifying how decisions would be made, and building the Bank’s standing with financial markets so it could lend at meaningful scale.
The World Bank signed its first loan: a $250 million reconstruction loan to France (through Crédit National). The funds supported essential imports for recovery—such as equipment, fuel, and raw materials—at a time when European economies faced severe shortages and needed foreign exchange to restart production.
To expand beyond the limits of paid-in capital, the World Bank entered capital markets by issuing its first bonds. The July 1947 issue raised $250 million in the United States, helping the Bank finance loans at scale and building a track record that future borrowing would depend on.
The World Bank approved a major reconstruction loan for the Netherlands to help finance its postwar recovery program. Like the early French operation, this lending focused on urgent foreign-exchange needs for rebuilding and restoring economic activity, rather than a single, tightly defined project.
The World Bank approved a reconstruction loan to Denmark to finance imports of equipment and materials needed for recovery. The description of the loan emphasized practical needs—such as machinery, vehicles, and raw materials—showing how early IBRD lending aimed to restart trade and production after wartime losses.
The World Bank approved its fourth loan, a $12 million reconstruction loan to Luxembourg. The financing supported rail and steel-related needs that were important for economic recovery and industrial output, reflecting the Bank’s early focus on rebuilding core productive capacity in Europe.
The United Nations General Assembly approved an agreement defining how the UN and the World Bank would work together. It recognized the Bank as a specialized agency while also emphasizing the Bank’s independence in lending and financial management—important for investor confidence and day-to-day operations.
In 1948 the World Bank approved two loans to Chile totaling $16 million, widely described as its first development loans. This marked an early shift beyond European reconstruction toward financing specific investments—such as electric power and transport—that aimed to raise long-term productivity.
As U.S. Marshall Plan aid expanded for Europe, the World Bank’s direct role in financing European reconstruction became more limited. The Bank increasingly redirected attention toward project-based lending elsewhere, especially infrastructure investments in non-European member countries.
Eugene R. Black succeeded McCloy as the World Bank’s third president. Under his leadership the institution strengthened its standing with investors and expanded development-oriented lending, building on the early bond-market strategy that made sustained lending possible.
By the end of fiscal year 1952–1953, the World Bank’s total commitments to non-European countries exceeded its commitments to Europe for the first time. This milestone summarized the post-1947 transition: large, early reconstruction loans were followed by a growing focus on development lending outside Europe.
World Bank (IBRD) founding and postwar reconstruction lending (1944–1955)