Being the first Turkish high school that is attending this conference we can say that we are really honored and happy to be a part of it and we are looking forward to working with others to help find solutions to current global economic issues. We are attending this conference with our advisor Aaron Wright; five Sophomores Aysen Aykut, Selin Senbayrak, Doga Duzgoren, Arda Adali, Idil Ugurlu, Irmak Erden; and two juniors Cem Kiral, Nilsu Yildiz.
Global economics has been a new territory for everyone on our team, and although we’ve found the topic difficult, we’ve learned a lot and we are positive that our solutions create a more inclusive and greener financial governance system. There is evidence across the globe that the current economic systems favor the wealthy and provide very little—if any—support to those less financially privileged. By implementing a fairer microfinance system—one that is not given based on one’s income, but on what that is fairer to the individual and provides realistic means for repayment—is a solution that we strongly support, especially in developing nations and countries where natural disasters are frequent. But the question remains: How can we make sure that our world economies promote a financial system that is more inclusive and promotes economic faireness?
In addition to making financial systems more inclusive, going green is the next step to making sure that our nation’s economies fall in line with the current state of our global climate. It is essential that economies do their part in making sure that the effects of climate change are reversed and that we leave the world a better place for future generations to come. Green investing, or process of putting money into organizations and companies that promote and dedicate their mission to the environment, is just one way to make sure that economics and banks pull their weight in environmental investment. As a prototype for such a business, our charity—based in Nepal—will not only help work with the current banking systems to eliminate the exclusiveness of the micro financial system, but also provide the support, education, and resources for people who have been devastated by climate issues to help improve and rebuild their lives without going into debt.
The younger generations of today are the power and voices of tomorrow. If we work together and make our ideas heard today, then we can path the way for a brighter future and a stronger economy that everyone can be a part of.
Our topic “Financial Governance: Making Global Finance Inclusive and Green” is taken from the Global Economic Symposium and organized by the Kiel Institute for the World Economy and the ZBW – Leibniz Information Centre for Economics.
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Financial markets are notoriously imperfect in at least two ways. First, they deny credit seekers without valuable collateral access to the capital market, thus, violating the principle of inclusiveness. People with a low income are mostly affected by this. Second, for projects with a long time horizon and probably high positive externalities (which are hard to measure in most cases) risk assessment is very difficult and therefore, financial institutions are not willing to grant credits on this basis. But many sustainable and eco-friendly projects fall under this category.
Green Finance can make an important distribution to sustainable development of developing and emerging countries. Especially when dealing with a resource efficient economic development and the reduction of carbon dioxide emissions, the financial industry can play an important part and can influence the development path of those countries substantially.
Inclusive Finance refers to the accessibility of financial products by everyone (including poor individuals). Microcredits are one example how financial inclusiveness can be achieved; crowd-funding is another. Modern communication systems could dissolve information asymmetries, which are one reason why loans for the poor fail frequently.
Increasingly, a set of rules for the financial sector is required, which takes the objectives of sustainability and inclusiveness into account.
How to design financial governance to achieve sustainability and inclusiveness? Who should be in charge to formulate and implement such rules? How to balance the financial market’s needs for collateral and the attempt to foster green and inclusive investments?
The topic “Financial Governance: Making Global Finance Inclusive and Green stems from the Global Economic Symposium (GES), which is organized by the Kiel Institute for the World Economy in cooperation with the ZBW – Leibniz Information Centre for Economics.