Developing sustainable capital markets: Mapping the challenges and setting priorities
A coalition of interested parties should join forces to bring about a powerful improvement in sustainable finance on world capital markets, according to Wolfgang Köhler, member of the board of managing directors at DZ BANK, which is emerging as a European leader in sustainable financial instruments.
Opening the eighth annual OMFIF-DZ BANK breakfast panel on 19 October at the International Monetary Fund-World Bank meetings in Washington, Köhler said investors, issuers, central banks and banks should coalesce. They should be supported by multilateral official institutions, regulators and policy-makers.
‘The magnitude and urgency of the sustainability challenges might sound daunting. The good news is we know what we need to do. With interest rates so low, there has not been a better moment in history to rebuild our world.’
Investors should ‘make visible’ their demand for sustainable finance. ‘This will encourage potential issuers to come to market with more deals.’ To issuers, he said: ‘Be ambitious and explore the opportunities of sustainable bond financing. You may be sitting on a pool of eligible sustainable assets and not know it.’
Central banks should use their advisory role in politics and their position as ‘anchor investors’ to become ‘catalysts’ for further market growth. Banks should take an educational role in teaching clients about sustainable finance opportunities, promoting deal flow to and satisfying ‘unmet investor demand’. Multilateral institutions should facilitate issuance of sustainable bonds by acting as anchor investors for local issuers and supporting the efforts of low income countries to achieve development goals without excessive debt.
The full text of Köhler welcome address can be read here. Other panellists included:
- Ignazio Angeloni, Member of the Supervisory Board, European Central Bank (2014-2019)
- John Berrigan, Deputy Director General, Financial Stability, Financial Services and Capital Markets Union, European Commission
- Werner Hoyer, President, European Investment Bank
- Javier Guzmán Calafell, Deputy Governor, Banco de Mexico
- Eila Kreivi, Director and Head of Capital Markets Department, European Investment Bank
- Joachim Nagel, Member of the Executive Board, KfW Development Bank