PREvention and RESilience
International Day of Banks
Date: December 4
Overview
The International Day of Banks highlights the pivotal role of both multilateral development banks and national banking systems in advancing sustainable development. Banks are crucial not only for funding initiatives tied to the 2030 Sustainable Development Goals (SDGs) but also for improving living standards through their financial expertise, capacity, and innovation.
Key Role of Banks:
- Supporting sustainable infrastructure, energy, agriculture, and innovation.
- Bridging financing gaps in areas underserved by commercial banks, such as micro, small, and medium-sized enterprises (MSMEs).
- Acting as a countercyclical force, particularly during financial crises.
- Promoting financial inclusion and funding development in local communities.
Global Context and Challenges
Achieving the SDGs requires tackling systemic economic and financial challenges, such as:
- Short-term financial focus over long-term sustainable development.
- Persistent global imbalances, including public and private debt vulnerabilities.
- The risk of financial volatility from external shocks like geopolitical conflicts and climate change.
- Technological changes, while offering potential solutions, also pose new systemic risks.
Banks must balance immediate financial stability with long-term developmental goals, ensuring their policies align with sustainability and inclusivity principles.
Key Strategies for Sustainable Development Financing
- Integrated National Financing Frameworks (INFFs):
- Ensuring cohesive financing strategies at the national level.
- Aligning banking policies with the SDGs.
- Collaboration Between Multilateral and National Banks:
- Leveraging local knowledge through national banks and global resources from multilateral institutions.
- Combining expertise to fund sustainable and inclusive growth projects.
- Sustainability-Oriented Financial Regulations:
- Creating policies that incentivize sustainable investments.
- Incorporating environmental, social, and governance (ESG) criteria into lending practices.
- Financial Innovation:
- Encouraging sustainable financial instruments like green bonds.
- Expanding access to digital financial tools for underserved populations.
The Role of National Development Banks
National development banks are especially critical for:
- Providing credit in sectors neglected by commercial banks.
- Financing renewable energy, science and technology, and inclusive industrialization.
- Promoting financial stability during crises.
Their alignment with the SDGs ensures a more holistic approach to fostering economic and social development.
Call to Action
The International Day of Banks is a reminder of the collective responsibility of governments, the private sector, and civil society to:
- Strengthen cooperation in global financial governance.
- Support innovative and inclusive financing systems that address inequality, climate change, and economic vulnerabilities.
- Ensure that all financial and economic strategies are integrated and aligned with sustainable development objectives.
By addressing structural inequalities, embracing new technologies, and fostering collaboration, banks can drive progress towards an equitable and sustainable future for all.
