A Role for Finance Ministries

Performance Framework: Effectiveness

Effectiveness concerns the degree to which markets price sustainability factors are into asset values. This is core to assessing the existence of market failures, although there remains a need to distinguish market failures and policy weaknesses associated with the real economy (e.g. lack of carbon pricing) and market failures and policy weaknesses in the financial economy, such as not considering the potential market impacts of future carbon pricing.

Inquiry Publications

  • Reforming Electronic Markets and Trading

    Date: 22-Dec-2015

    Electronic markets and high-frequency trading (HFT) now comprise over half of all securities trading on both public “lit” exchanges and “unlit” dark pools and electronic platforms.This paper documents the proceedings of an expert seminar, chaired by Hazel Henderson. It includes contributions from: Hazel Henderson, Ethical Markets Media; John Ramsay, IEX; Dave Lauer, KOR Trading; Robert Zevin, Zevin

  • On the Role of Central Banks in Enhancing Green Finance

    Date: 20-Feb-2017

    The paper examines the role of central banks in ‘greening’ financial systems. Given the enormous investments needed to bring about a green transformation, the financial sector will have to play a central role in allocating resources towards a sustainable and green economy – and stop financing activities that harm the environment. Against this backdrop, the

  • Imagining a Sustainable Financial System

    Date: 07-Dec-2014

    Imagining a sustainable financial system allows us to move beyond conventional wisdoms. This paper sets out that a sustainable financial system would be one that serves the long term needs of a healthy real economy, an economy that provides decent, productive and rewarding livelihoods for all, and ensures that the natural environment on which we all

  • China Report: A Framework for Green Finance

    Date: 06-Oct-2015

    The existence of externalities has made it hard to quantify the intrinsic value of the “green mountains and blue water” of the natural environment. This has led to a dysfunction in traditional financial markets, which are delivering an insufficient supply of capital for green development and an oversupply of capital for highly polluting activities. As a new financial

  • China Report: Lessons from the Development of Green Finance in China

    Date: 06-Oct-2015

    With the initial progress of China’s green finance market, some lessons are emerging that are useful both for the further development of the green finance system and for other emerging market countries embarking on green finance development.  Strategic political commitment has been the key driver for China’s development of green finance, but translating this into

  • Sustainable Finance?

    Date: 29-Feb-2016

    This paper seeks to assess how the international banking community is building sustainability into corporate strategies; how effectively these strategies are being implemented; how sustainability is being embedded into key business processes and decisions; and how sustainability principles are reflected in reporting. It presents an assessment of the sustainability performance of banks using a range of

  • China Report: Problems and Difficulties in the Development of China’s Green Finance

    Date: 06-Oct-2015

    In recent years, financial market policy-makers and regulators in China have shown leadership in advancing their roles in creating a green financial system. However, the impacts to date have been constrained by countervailing forces. In particular, the performance criteria on which local government officials are assessed still prioritizes economic growth over environmental compliance. The positive

  • Effects of Financial System Size and Structure on the Real Economy

    Date: 07-Nov-2015

    This paper provides an overview of the findings in the empirical economics and finance literature on the effects that various financial system characteristics have on real economic outcomes. Although the empirical evidence on various relationships is mixed, there appears to be relatively robust empirical evidence that: financial deepening promotes economic development only up to a

  • Greening the Financial System: Exploring the Ways Forward

    Date: 01-Nov-2017

    This briefing summarises the discussions held during the “Greening the Financial System: Exploring the Ways Forward” event in Washington, D.C. on 12 October 2017. The goal of this convening, the fourth in the series, was to examine lessons from developing and implementing green finance initiatives over the last few years and to highlight successful examples

  • China Green Finance Task Force Report: Theoretical Framework

    Date: 02-Apr-2015

    Despite the considerable headway made in the promotion of green credit by the government of China, efforts for building a green finance system remain fragmented and conceptual. This paper develops a theoretical framework for green finance. A ‘green finance system’ refers to a series of policies, institutional arrangements and related infrastructure building that, through loans, private equity,

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