1. Themes
  2. Private Finance
  3. Monetary Policy, Financial Regulation, and Supervision

Monetary Policy, Financial Regulation, and Supervision

Strengthening regulatory frameworks and aligning monetary policy operations with climate goals are essential to ensuring financial stability and facilitating green investments.

2030 Goals

01

Monetary policy frameworks fully account for climate risks and contribute to an orderly transition towards a net-zero economy, including through credit operations, asset purchases, and collateral policies.

02

Financial regulation and supervision incorporates robust safeguards against physical and transition climate risks, and contributes to a net-zero and nature-positive financial system. This includes enabling treatment of assets (such as long-term infrastructure) and financing mechanisms (such as blended finance) that contribute to the transition.

Status

No Progress

The NGFS reports that member central banks have conducted pilot programs to protect their own balance sheets and contribute to the transition through monetary policy operations.

The FSB reports that progress has been made across all four blocks of its Roadmap for Addressing Climate-related Financial Risks (disclosures, data, vulnerabilities analysis, and regulatory and supervisory practices and tools).

WWF reports that integration of climate and nature risks into core monetary policy operations remains very limited, uneven and largely exploratory.

The IMF has issued guidance for G20 countries, recommending that climate-related financial risks be included in monetary policy frameworks to enhance financial stability and facilitate green investments.

Leading Actors

Cooperation is required between these actors and audiences to drive progress foward in Monetary Policy, Financial Regulation, and Supervision.

Multilateral Development Banks

World Bank

International Organizations

Financial Stability Board

International Organizations

International Monetary Fund

International Organizations

OECD

International Organizations

UN

Alliances

G20

Alliances

Glasgow Financial Alliance for Net Zero (GFANZ)

Supportive Stakeholders

Sustainable Finance Lab

Supportive Stakeholders

International Sustainability Standards Board

Supportive Stakeholders

International Financial Reporting Standards

Supportive Stakeholders

Taskforce on Climate-related Financial Disclosures (TCFD)

Supportive Stakeholders

Sustainable Banking and Finance Network

Alliances

G7

Key Milestones

Showcasing the key reform milestones for Monetary Policy, Financial Regulation, and Supervision that have been addressed at global events.

View Roadmap

Washington, DC

WBG/IMF Annual Meetings

View Event
  • Monetary Policy, Financial Regulation, and Supervision

    1.Highlighted that climate finance and economic stability are interwined priorities 2. Discussions held around the need to build smarter prudential regulation alongside public finance instruments that can better absorb risk and crowd in private investment. 3. African and Latin American finance ministers also called for stronger representation in global financial governance.

  • Mitigating Currency Risk

    A Knowledge Cafe' on the theme of Scaling Local Financing to close Infrastructure deficits highlighted the issue of rising foreign exchange risk in infrastructure financing for EMDEs. It involved sharing of insights from WBG knowledge/ country programs and international private investors to decode proven pathways and interventions to stimulate an action-oriented dialogue on local infrastructure financing solutions.

Learn More

Publications and educational material to deepen understanding of Monetary Policy, Financial Regulation, and Supervision.

Toolkits for Policy makers to green the financial system

Monetary Policy, Financial Regulation, and Supervision

The report guides policymakers, regulators, central banks, and supervisors on aligning financial systems with climate and sustainable development goals.

Go to Resource (opens a new window)

Guide for Supervisors Integrating climate-related and environmental risks into prudential supervision, Technical Document, NGFS

Monetary Policy, Financial Regulation, and Supervision

A guide to central banks and financial supervisors in integrating climate-related and environmental risks into supervision. It provides non-binding recommendations, best practices, and tools to help ensure financial system resilience while allowing flexibility across jurisdictions and supervisory mandates.

Go to Resource (opens a new window)

UN Principles for Responsible Banking, Principles for Responsible Investment, Principles for Sustainable Insurance

Monetary Policy, Financial Regulation, and Supervision

A global framework that helps banks align their strategies with sustainable development goals and the Paris Climate Agreement. It promotes responsible banking by guiding financial institutions to manage social and environmental impacts and contribute to a sustainable future.

Go to Resource (opens a new window)

OECD Center on Green Finance and Investment : A global platform for knowledge exchange between the private sector, government and regulatory institutions, academia, and civil society.

Monetary Policy, Financial Regulation, and Supervision

Data on finance and investment on environmental goals, climate goals, biodiversity, water and greening SME's.

Go to Resource (opens a new window)

Primer for climate related engagement with the IMF

Monetary Policy, Financial Regulation, and Supervision

The report seeks to empower low- and middle-income countries to use the Resilience and Sustainability facility more strategically by improving coordination across ministries and with development partners, to build macroeconomic policy frameworks that tackle climate change and long-term sustainability challenges.

Go to Resource (opens a new window)

Sustainable Stock Exchanges Initiative

Monetary Policy, Financial Regulation, and Supervision

A UN Partnership Program, whose aim is to support members in working with stakeholders including investors, issuers, regulators, supervisors, policymakers, and international organizations to enhance sustainable finance.

Go to Resource (opens a new window)

Related Topics