Atiur for reshaping financial system to support sustainable development

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BSS, Dhaka :Bangladesh Bank (BB) Governor Dr. Atiur Rahman recommended reshaping financial system to support sustainable development, especially in the countries where most of the people urgently require strong instutional financial support.The governor put forward the recommendation while presenting a paper on “Design of a Sustainable Financial System” at the Second Advisory Council Meeting of United Nations Environment Programme (UNEP) in New York, USA on 26 September 2014, according to a BB press release made available here on Sunday.Dr. Rahman, who is also a member of the Council, highlighted BB’s engagement in reshaping financial system to support sustainable development in a learning session where experiences of Brazil, China, South Africa and the United Kingdom were also shared.The governor said that BB is one of the very few early recognizers 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.He added that mandated by its charter to support output and employment growth besides protecting monetary and financial stability, 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. 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.He added that with setting priorities on the underserved areas, BB initiated various low cost refinancing lines along with differentiated equity margin requirements, differential loan pricing and risk grading, government funded interest subsidy support and better CAMELS rating for environmentally benign sustainable financing activities.The governor concluded his presentation by highlighting the impact on sustainability in terms of six plus percent annual 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 ILO – are in the final stage with indications of impressive sustainable outcomes in terms of socially responsible financing, employment generation and economic growth.Besides Dr. Rahman, the 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.