New York, NY (BBN)- Bangladesh Bank (BB) Governor Atiur Rahman highlighted BB's engagement in reshaping financial system to support sustainable development at the Second Advisory Council Meeting of UNEP's Inquiry on 'Design of a Sustainable Financial System' held in New York on Friday.
Experiences of Brazil, China, South Africa and the UK were also presented in the high-level meeting.
Dr. Rahman, who is also a member of the Council in his presentation pointed out that the BB is one of the very few early recognisers on that the conventional short term business cycle focused monetary and financial policy approaches are failing to address the longer term needs of inclusivity and environmental sustainability in growth pursuits.
Mandated by its charter to support output and employment growth besides protecting monetary and financial stability, the BB stepped into initiatives of imparting a deliberate directional bias in financing flows away from speculative and sustainability harming uses towards inclusive financing of ‘green’ output initiatives, the central bank chief added.
“This approach has succeeded in drawing all market intermediaries into proactive engagement in the various initiatives, often with their own innovations of cost efficient service delivery modes.”
The BB governor also said with the set priorities for the underserved areas of inclusive, sustainable financing on three broad fronts - agricultural financing, SME financing and green financing of renewable energy, waste treatment, low carbon output options - BB initiated various low cost refinancing lines along with differentiated equity margin requirements, differential loan pricing and risk grading, government funded interest subsidy support, better CAMELS rating for environmentally benign sustainable financing activities.
The central bank chief concluded his presentation by highlighting the impact on sustainability in terms of six plus per cent annual gross domestic product (GDP) growth for more than a decade accompanied by single digit CPI inflation, lower single digit budget deficit, very viable and stable external sector supported by robust export earnings and remittances inflows.
He also mentioned that two impact studies - one by Zurich based think tank Council on Economic Policies (CEP) and the other by the International Labour Organisation ( ILO) - are in the final stage with indications of impressive sustainable outcomes in terms of socially responsible financing, employment generation and economic growth.
His presentation created a lot of interests and enthusiasms among the participants and other members of the Advisory Council of UNEP's inquiry on design of a sustainable financial system who wanted to learn more about BB's experience of inclusive and sustainable financing initiatives.
Besides, Dr. Rahman, this high-level UNEP Advisory Council includes Finance Minister of Uganda, President of Standards & Poor, Vice President of World Bank, President of Federation of Banks of Brazil and many other top- notch investors and regulators from all around the World.
BBN/SSR/AD-27Sept14-11:55 pm (BST)