The world marks International Day of Banks

Photo by Getty Images.
Photo by Getty Images.

December 4 is the official International Day of Banks, marked globally to recognize the significant potential of multilateral development banks and other international development banks in financing sustainable development. This is in addition to providing know-how, and the vital role of banking systems in contributing to the improvement of living standards.

The day was adopted by the UN General Assembly in 2019.

Given the complex and ambitious set of transformations needed to deliver on the 2030 Agenda, coherence across policy areas is critical. There is a growing understanding of how financial regulations are affecting incentives for sustainable development investment.

The UN said there is less understanding of the impacts of social and environmental risks on credit quality and the stability of the financial system. Policies and regulations need to act together to create a sustainable financial system. The regulatory system needs to be congruent with the measures used to boost the sustainability of the private financial system, such as sustainability reporting and impact measurement.

Therefore well-run national development banks can help countries develop financing options for Sustainable Development Goal-related investments. Such banks should be aligned with the Goals in a holistic way and be considered in integrated national financing frameworks.

Collaboration between national development banks and multilateral banks, through co-financing or on-lending arrangements, can enhance Goal-related finance through the complementarity of international resources and local market knowledge.

According to the United Nations, achieving sustainable development in particular eradicating poverty, reducing inequality and combating climate change requires a long-term perspective, with Governments, the private sector and civil society working together to tackle global challenges.

More effort is needed at all levels to ensure that strengthened collective action can help reduce global uncertainty, while financial innovation can generate significant progress across the 2030 Agenda and the Addis Ababa Action Agenda.

The global economy is facing heightened risks and financial volatility, with global growth likely to have peaked. Geopolitical factors, trade disputes, financial market volatility and non-economic factors, such as climate change risk further impeding growth, stability and development and worsening poverty, inequality and vulnerabilities. It is becoming increasingly urgent to address the systemic economic and financial risks and architectural gaps that threaten the implementation of the 2030 Agenda.

(With input from UN News)