The Banking Executive, Issue 155, November 2021

ISSUE 155 NOVEMBER 2021 the BANKING EXECUTIVE 1 Editorial FINANCIAL STABILITY AMID CLIMATE STABILITY Climate stability is one of the determinants of financial stability. Green finance is a topic which has regained its global attention especially after the Rome Summit. Green finance, in essence, is about the way in which the financial sector responds to climate change, and how it can help mitigate its impact and promote ecological sustainability by channeling funding into environmentally friendly technologies and economic sectors, while also capitalizing on their growth. To mitigate the risk of climate change, massive investment is required in three areas: infrastructure and technical solutions, especially in transport, energy production and consumption and agriculture; intangible goods, including continuous training and research; and the adaptation and improvement of existing structures, notably the thermal rehabilitation of buildings. This leads to a massive need in green financing framework: green securitization, green covered bonds, green derivatives, green crowdfunding platforms and green private equity should all be promoted. Central bankers and supervisors play a major role in transitioning to a green financial system, through heeding the perimeters of their mandate. Climate change affects us all - and the clock is ticking. The longer we wait, the higher the costs and the more dramatic the consequences will be. Dr. Joseph Torbey, Chairman - World Union of Arab Bankers