Central Banks and Stock Exchanges
Thursday, September 29
17:45 - 19:15
The private sector can act independently, but sometimes it needs the support of the public sector as it cannot in all cases direct capital independently to those activities where it is needed, but where risks and profits are incompatible with the private sector’s authority. The public sector can support sustainable finance initiatives that serve the public good.
The COVID-19 pandemic highlighted the fragility of the global economy. The public sector had to intervene with the purpose of preventing large-scale and long-term economic disruption. We expect this experience to change the role of governments and central banks in addressing such global issues as climate change and biodiversity loss.
Using incentives and penalties, they can play a more active role in driving sustainable development, especially in addressing market mechanisms’ failures, creating new markets, and protecting human rights and social norms.
At the macroeconomic level, ‘measuring the right thing’ requires policymakers and regulators to focus less on the traditional measures of GDP and more on measures that properly account for changes in natural, social, and human capital. The government and central bank can translate this into practical actions for the financial system by requiring financial institutions to measure the right things, such as climate risk or the depletion of ecosystem services. The government could also introduce regulations requiring all companies to measure their social and environmental impact and dependencies, which would be of great importance for the financial system because it could change the valuation of companies.
The discussion session will include the following questions:
- Role and objectives of central banks and stock exchanges;
- The regulator’s position in the changing economic paradigm;
- Trading in carbon units and financing nature-based solutions;
- The importance of central banks and stock exchanges in the transition to a green economy;
- Preserving financial sovereignty.
Programme Director of the Ecumene 2022
Director of the Department of Financial Policy, Ministry of Finance of the Russian Federation
Honarary Adviser, Financial Reporting Council, Hong Kong
Chairman of the Moscow Exchange Supervisory Board
* The Programme may be subject to change