Bangladesh Bank Governor Dr. Atiur Rahman speaking in the Annual Meetings-2015 of World Bank-IMF on October 8 in Peru. Bangladesh Bank (BB) has planned to invest some of its foreign exchange reserve in green bonds to help developing a global green finance support bond market. BB Governor Dr. Atiur Rahman disclosed this while addressing a discussion meeting titled ‘Possible International Cooperation Pathways and Next Steps for Green Finance,’ held in Lima on Thursday, according to a message received here on Friday. “We’re actively seeking to deploy some of our foreign exchange reserves in investments in liquid issues of green bonds of multilaterals and other highly rated financial corporate houses,” the central bank chief announced. He also said the BB believes that besides traditional long term investors like life insurers and pension funds, sovereign wealth funds and new multilateral fund initiatives like the proposed BRICS infrastructure fund can make big contributions in promoting financing of global green growth. “Debt finance raising by non-financial corporate houses is still insignificant in all LDCs’ underdeveloped capital market, green project initiatives like others, therefore, remain overly dependent on financing from banks and financial institutions,” BB Governor Dr. Rahman explained. The local green project initiatives are also generally too small in size and stature to raise finance affordably from international markets by issuing green bonds, said to the governor. “We are therefore looking for ways of developing liaison between networks of local green project entrepreneurs and multilaterals like the WB, IFC that raise green bond funds on their own high credentials for investments in eligible green project initiatives,” Dr Atiur noted. Dr. Rahman also said environmental harmony is one of the three pillars of sustainable development. “Large scale green transformation is a must for ensuring environmental sustainability towards pathways of long-term sustainable development.” Policy interventions at the national and international levels are essential to motivate and align both the supply and demand sides of the financial assets to support sustainable development financing, he added. “Greening the growth process through sustainable green financing will pave the way towards green economy. But the transformation from conventional consumption, production and growth practices to green growth process is not so automatic rather very challenging for host of reasons,” he observed. He also said these challenges are sometimes very diverse across countries and, in most of the cases, are acute in developing countries like Bangladesh. Dr. Atiur Rahman stressed on the need for mobilising required funds, developing a green finance supportive bond market and international policy support and cooperation for sustainable financing for overcoming the challenges towards green economy. The event was organised by the United Nations Environmental Programme, the People’s Bank of China and the Bank of England in Lima, Peru as a part of Annual Meetings-2015 of World Bank-IMF on Thursday. Dr. Atiur Rahman also spoke at the FSB-IMF-WB High Level Roundtable about ‘Correspondent Banking’ organised by Financial Stability Board, World Bank & IMF in the Lima Convention Centre in Lima, Peru on Thursday. In the roundtable, Governor Rahman highlighted the extent and causes of reduction in correspondent banking services. Dr. Rahman emphasized that the recent episodes of supervisory treatment of some major international banks perceived by them as disproportionately harsh may have added further to their expected usual cautiousness in going into correspondent relationship with these small new Bangladeshi banks; the same way as it created de-risking by de-banking trends in dealing with MSBs channeling workers’ remittances to low income developing countries. He also clarified the regulatory expectations of Bangladesh Bank and illustrated the improving compliance with international standards in Bangladesh. He also stressed upon facilitating due diligence and information sharing among different stakeholders. The Bangladesh Bank governor also attended the ‘Inaugural Meeting of the Vulnerable Twenty (V20) Group of Ministers of Finance’ on behalf of V20 Troika member and Minister of Finance of Bangladesh Abul Maal A. Muhith, held in Lima, Peru on the same day. In his observations, Dr. Rahman said, “This V20 inaugural event is the affirmation of our recognition of the urgency of the fastest feasible global transition to climate resilient sustainable low emission output practices lifestyles. In this new platform we shall work together to those ends, learning from each other and also drawing upon knowledge, expertise and resource support from all available sources. Our dialogues and initiatives in this forum will help keep ourselves deeper committed in our country level climate action initiatives, as also in our engagements in sustainability issues at the broader regional and global levels.” He concluded with wishing an exciting, richly fulfilling and enlightening journey on collective path of climate actions towards attainment of the 2030 UN SDGs. Bangladesh Bank Governor Dr. Atiur Rahman attended the launching event of the United Nations Environmental Programme (UNEP) Advisory Council’s Inquiry Report on ‘Design of a sustainable global financial system’ in Lima, Peru on thursday. Achim Steiner, UN Under Secretary General and Executive Director of UNEP, Mark Carney, Governor, Bank of England, and Yi Gang, Deputy Governor of the People’s Bank of China attended. Dr. Rahman remarked the Inquiry’s global report as a very timely and fitting accompaniment of the SDGS 2030 unanimously embraced by the global community in September 2015. He noted that the report has rightly sketched the right ingredients for reshaping new global financial system that we need to support sustainable development. It has also outlined a roadmap for the future financial system which is, at present, afflicted by aberrant motivations and many weaknesses making it prone to mispricing, rent seeking and instability towards a new orderliness correctly aligned with risks from environmental unsustainability and social iniquity, guided by behavioral ethos and norms securely anchored in a strong sense of social responsibility, he further emphasized. Dr. Rahman also highlighted how BB’s financial inclusion initiatives helped Bangladesh economy maintain steady stable spell of inclusive growth at around twice the rate of post GFC growth of global output, with unprecedented price and macroeconomic stability, and strong gains in external sector viability.
