What does it mean for an investment to be responsible or ethical? Certainly, human behaviour is the only one liable to be qualified as ethical. Actions by animals or acts of nature lack this dimension, irrespective of whether their consequences are good or bad. Finances, as an exclusively human activity, could thus also be analysed from this dimension. Broadly, we identify ethical or responsible investment as that which meets certain standards, namely ESG (environmental, social and governance) criteria. As I mentioned, this is a very topical subject in the press, but we are clearly dealing with something more than a passing trend. Large companies, credit institutions, multilateral banks, official credit agencies and even governments themselves have been making a growing number of debt issues that meet these criteria, generally under the name of “green bonds”, which are duly focused on environmental sustainability. But issues of “social bonds” are also beginning to emerge. However, these ESG standards go beyond any debt class. Companies are increasingly incorporating these criteria into their decisions and actions. And banks are certainly no exception to this trend. 1  Banks have, for some time, had corporate social responsibility areas. But their involvement needs to go further. As we supervisors have been insisting, banks also need to incorporate these elements into their risk analysis and management. In this respect, both the European Single Supervisory Mechanism (SSM) and the Banco de España have recently published supervisory expectations relating to the inclusion of environmental risk in banks’ management.

Muhammad bin Ibrahim: The way forward for development financial institutions Opening address by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Symposium on Development Financial Institutions “The Way Forward for Development Financial Institutions”, Kuala Lumpur, 19 September 2017. * * * Selamat datang” and a very warm welcome. Thank you for the opportunity to speak today at this important gathering to discuss the way forward for development financial institutions. In 2012, the music video “Gangnam Style” by Korean pop artist PSY took the world by storm. Being the first video to record more than 1 billion YouTube views, its infectious dance moves have become universally recognised, transcending borders and social status. The video marked the beginning of the rise of the Korean cultural phenomenon known as Korean Wave or “Hallyu”, a new growth area for its economy. Today, the export of Korean culture content, including films and music, is estimated at USD83.2 billion. In under a decade, the sector grew to contribute 0.7% to South Korea’s GDP in 2011, supported over 67,000 jobs and generated USD3.3 billion in tax revenues. This extraordinary rise of the Korean Wave can be attributed to the growth of investment in the creative industry. The industry was boosted by the government’s strategy to prioritise the sector as an engine of growth after the Asian Financial Crisis. The Korean government had earmarked 1% of the national budget for development financial institutions to kickstart the sector.