The World Bank’s Post

#FinanceProsperity Interesting report. Two key elements got my attention: 1.     ➡️Sovereign-bank nexus risk: Bank exposure to government debt increased by 35% in EMDEs over the last 12 years and averages 16% of total bank assets as of 2023. Exposure is 8 pp higher in state-owned banks. This trend generates concerns on concurrent risks to potentially affect banking sector stability as fiscal pressures in emerging markets and developing economies continue to grow. 2.     ➡️Climate risk: EMDEs will need broader policy and financing support (beyond the domestic banking system) to effectively tackle climate risks and opportunities. This includes: -       Adoption of taxonomies – enabling identification of investment opportunities aligned with climate targets (social and nature-related targets should also be included, in my view) -       Development of well-functioning capital and insurance markets, critical to mobilize capital and investment These two issues are related as increasing climate risks will only exacerbate fiscal imbalances and financing needs. Although required policies involve medium and long-term objectives, action is required now. #climatefinance #justtransition #emerging markets #climaterisk

Very honored to have contributed to the World Bank’s "Finance and Prosperity 2024" report. The report spotlights several areas: 🔹 It provides an overview of financial trends in EMDEs where 70% of them face moderate risks, yet 50% of lower-income countries could encounter high financial sector risks within a year. 📈 🔹 It delves into the sovereign-bank nexus, where banks' exposure to government debt has increased to unprecedented levels in the last decade. 🔹 It discusses climate action. EMDEs, excluding China, punch above their weight, contributing 25% to global output but receiving a mere 14% of global climate finance flows. 📊 With 98% of adaptation finance coming from public funds and a concerning 28% of EMDE banks not providing any climate financing, the report is a call for change, pushing for a shift in how we fund our fight against climate change. The report is a must-read for policymakers, financial professionals, and anyone keen on understanding finance and development. It offers innovative approaches to navigate these challenges. Read full report: https://shorturl.at/ocC4c Press release: https://shorturl.at/Tffgj Interactive data: https://shorturl.at/JXbY7   #Prosperity #WorldBank #EconomicDevelopment #Climate #Finance

At the beginning of the week, I sat down to read the WB report, which had many insights and good data about macro-econ, global finance and a lot of useful information for investment. I recommend it is worth the time to read. https://lnkd.in/gX_Mxyra

#DYK advancing global financial reforms and financial mobilisation are high priorities for CDB and our small vulnerable #Caribbean economies? We'll examine these at #SIDS4. J. Jason Cotton

Just transition, and how banks can implement it, is becoming clearer.

NEW: What is the "middle-income trap" and how can countries escape it? The World Bank's #WDR2024 report outlines a comprehensive roadmap to help developing economies achieve high-income status. Discover how the #3istrategy of investment, infusion, and innovation can drive economic growth. ➡️http://wrld.bg/Fgn450SRvE5

Geoeconomic fragmentation and firms’ financial performance: Firms with greater exposure to geopolitical risk experience increased probability of default, reduced market valuations, and higher financing costs https://lnkd.in/ga3MPRU2

The global financial system is at a critical juncture. 🌍 The global financial system is essential to the flow of finances between countries and in responding to shocks to the global economy. With challenges like pandemics, debt, wars, and especially climate change, the system is being pushed to its limits. Key stakeholders from governments, the economic and financial community, and the climate community must work together to address systemic issues. The need for reforms is clear, but the path forward requires collaboration and innovative thinking. Can the global community rise to the challenge and build a system fit for a low-carbon, climate-resilient future? The WRI Finance Center explores: https://bit.ly/3yVATcm #SustainableFinance #SustainableDevelopment #ClimateFinance

Pleased to share the World Bank’s latest report: "Finance and Prosperity 2024”. It explores the financial sector developments and vulnerabilities in emerging markets and developing economies (EMDEs). A few highlights: 🔺60% of banks in EMDEs dedicate less than 5% of their portfolios to climate-related investments. This indicates a significant opportunity for banks to step up and support the transition to a low-carbon economy. 🔺10% of EMDEs have adopted green and sustainable taxonomies, compared to 76% in advanced economies. This suggests a need for better alignment of financial strategies with environmental goals. 🔺16% of climate finance in EMDEs channeled for adaptation, and 98% of that coming from public or official financing. This showcases how adaptation finance is underfunded even though it’s crucial for climate resilience. 🔺30% of the countries analyzed in the report face high financial-sector risks within the next year, pointing to the need for stronger policy frameworks and institutional capacities. 🔺The Sovereign-Bank Nexus has seen a 35% increase in banks' exposure to government debt since 2012, highlighting potential vulnerabilities and the importance of improved risk management. Congratulations to everyone involved for their hard work and dedication and thank you to colleagues in Prosperity MENA for their coordination and contributions. Read full report: https://shorturl.at/ocC4c Interactive data: https://shorturl.at/JXbY7 #Prosperity #WorldBank #EconomicDevelopment #Climate #Finance

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