As a cooperative institution, IBRD does not seek to maximize profit but to earn adequate return on assets to ensure its financial strength and sustain its development activities on an ongoing basis. In fiscal 2000, a reduction in the loan loss provision due to improved credit quality of loans boosted ROA by 0.16 percent. Consistent with its development mandate, IBRD's main risk is the credit risk of its loan portfolio. This risk is closely managed. IBRD keeps its exposure to market risk quite limited.
Market risk arises due to movements in market variables such as interest rates and exchange rates.
However, the Bank remains strongly capitalized. The Bank borrows globally in multiple markets and currencies. Outstanding debt after swaps reached 76 percent of average total earning assets, as of June 30. As emerging markets recovered from the financial crisis, IBRD lending in fiscal 2000 fell below the record levels of the last two years, back to historical pre-crisis trends in lending levels. The level and type of Bank lending support has been continuously evolving in response to changing demands from country clients.