These instruments are becoming increasingly relevant investment alternatives but overall remain a minor portfolio item. Challenges We have several sources and data providers to shed light on the evolution of sustainable finance instruments, but what exactly is a sustainable bond market? The information presented above provides an overview of euro area residents’ issuances and holdings of debt instruments with sustainability characteristics. These indicators provide information on the proceeds raised to finance sustainable projects. In the case of 2  green bonds, they are identified as “debt securities where the proceeds are used to finance projects with clear environmental benefits” and various sources are used to gain a broader picture. Since debt securities are considered sustainable if they are at least labelled as such by their issuers (i.e. self-labelled), in addition to the information provided by data providers, the loosest level of assurance is relied upon. The ECB notes that remaining limitations are mostly due to the lack of internationally accepted harmonised definitions of certain concepts.2  In recent years, financial market initiatives have moved ahead of legislation and several private providers have developed labels to identify green bonds and other sustainabilityrelated bonds, for example, the International Capital Market Association and the Climate Bonds Initiative. However, this does not mean that there is a single definition. In the European Union, the European Commission has been working over the last few years on the development of a European Green Bonds Standard in order to establish uniform requirements for issuers of this type of bond.

The most pressing challenge, therefore for the global economy, is to generate an economic recovery that is balanced and sustainable. Although the growth momentum has improved in a number of major economies, the growth has thus far been modest. In addition, weaknesses in several major economies continue to point to a global economy that remains vulnerable to downside risks. While the growth performance in most emerging economies is projected to moderate, collectively emerging market economies remain an important driver of growth of the world economy. A less robust external sector, BIS central bankers’ speeches  1  slower domestic demand and specific domestic factors are amongst the reasons for this growth performance. In Asia, the growth for 2015 is projected to be sustained at 6.4%, while growth in the ASEAN-5 is projected to be in the region of 5%. A further phenomenon affecting the global economic performance is the significant decline in global oil prices. While this has partially offset the weaker-than-expected growth momentum in some of the advanced countries, it has, in different degrees, adversely affected the oil exporting economies resulting in divergent growth performance across and within regions. Overall, however, the global economy is expected to benefit from the lower oil prices. A further recent development is the consequences of the unprecedented and divergent monetary policies being pursued in the major economies which have now resulted in significant policy spillovers to other parts of the world.