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Arab banks discussing financing sustainable development goals in a regional meeting is in itself a major accomplishment; endorsing green banking is, nonetheless, an unprecedented achievement.The meeting endorsed a shift to green banking and adoption of mechanisms to introduce green products as an integral part of banking services, with a focus on small and medium enterprises.To ensure efficient proper implementation, the banking forum called for the establishment of an independent department for sustainable development in each bank.As the effective commitment by banks to financing sustainable development projects requires rules and regulations that are applicable to all, the forum called on central banks to develop regulatory directives that require banks to take into account the objectives of sustainable development.While bank credit provides a big portion of financing, only a small part can be explicitly classified as "green".Fostering long-term finance is currently constrained by biased regulatory requirements, challenges to perform sustainability assessment on the long-term, or demand for higher risk and liquidity premiums, thus making projects less viable from an economic and finance perspective.Commitment to green banking cannot be limited to a public relations exercise, but needs a change of course in the core business of banks, translated in financing projects and introducing consumer banking products which promote sustainability.
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