olaf sleijpen : investing in the future speech by mr olaf sleijpen, executive board member of monetary affairs and financial stability of the netherlands bank, at the apg global investors day, amsterdam, 16 november 2023. * * * even for the international participants at this event, it can hardly have escaped your attention that we have national elections next week. we will elect our new house of representatives, and there are 26 (! ) political parties clamouring for our attention. always an interesting time, because elections are about choices. and choices can be made based on many different considerations. i think that in this time of transition, in this time of aging and migration, in this time of climate change and energy transition, disruptive new technologies and devastating loss of biodiversity, the most important consideration is the choice between today's wishes and tomorrow's needs. the choice between instant gratification and sustainable development. and that proves to be a difficult one. not only for votersbecause it proves difficult to look further than your own backyard, further than one election, one period of government. and that is not only true in politicsin the financial sector we also know how difficult it is to look beyond risk and return, to take broader environmental and societal impact into consideration, and to look at the impact on the future instead of the proof of the past. like in politics, that attitude, that ingrained short - sightedness, has to change. because as apg says on its website : " what is the use of a good pension, if the world around you has become unliveable? " the question i want to address today is : how can we, how can the financial ecosystem play its part in the transition towards a sustainable future, towards sustainable prosperity? because it's undeniable that policymakers, regulators and the financial sector all have their part to play, and they all depend on each other. it's undeniable that the transition needs to be funded, and that it is the financial sector that can allocate resources, that can fuel the transition towards a carbon - neutral society in harmony with nature. towards a world where environmental, social and governance criteria are in balance. this impact - driven mindset has to be the basis of our decision - making, especially because it is squarely within all of our mandates and responsibilities. as frank elderson, ecb board member, said earlier this year : " destroy nature

is a key factor to assess the global perspectives. where are we now? this year has started on a rather slow motion and the mood is far from positive. the economic and financial strains in the us and their spillovers to other advanced economies are dragging down global economic forecasts. even in japan, where the direct impact of the turmoil has been relatively contained, the economy remains fragile and prospects have deteriorated. the emerging market economies stand in sharp contrast with this gloomy outlook, as their growth forecasts have been revised down only marginally. in fact, one of the most surprising features of the recent developments in the world economy has been the resilience of most emerging market economies to the unravelling of the global turbulence. this feature is even more remarkable taking into account their recent history of financial and economic instability. if we look at basic financial market indicators of risk – such as the sovereign spreads, exchange rates or equity markets – what we observe is that, overall, they have behaved significantly better than comparative asset classes in the industrial economies over the past nine months. in addition, credit has generally continued to be available in these economies – albeit, admittedly, at a somewhat higher cost – and creditworthy emerging market borrowers have not been shut out from international markets, contrary to what used to happen in the past. it is true that issuance abroad has been reduced notably since the beginning of the turbulence, and that those borrowers with relatively low credit ratings may have been shut out completely from international markets. however, anecdotal evidence indicates that they have been able to substitute their sources of finance by shifting into bank loans, something that can also be seen as a positive feature of the functioning of financial markets. in fact, the limited transmission of the turbulence through the financial channel is the key difference with the past. more precisely, what has made the emerging markets so resilient this time? the answer is the building up of strengths, not only in asia, but also in latin america and in emerging europe. on the one hand, growth has become more broad - based and with a much stronger contribution of domestic demand, in other words, more self - sustainable. in addition, southsouth and intra - regional trade linkages among emerging economies have increased. this has mitigated potential trade spillovers from industrial economies, although it has not suppressed them, of course. very importantly, economic policies have been generally sound. on the financial front, the absence of significant exposures