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Blended Finance: Implications for Supervisors

Toronto Centre

This Note highlights the reasons why EMDC financial services supervisors should increase their understanding of blended finance transactions, including: • the need for EMDC supervisors to raise their awareness of blended finance structures and risks, as their supervised firms may become increasingly involved in blended finance structures; • EMDC supervisors with a developmental mandate, such as those in many emerging markets, have an even stronger reason to engage; • the important role that supervisors can play in clarifying regulatory issues that affect the use of blended finance structures in their markets; • the importance of international organizations aiming to develop blended finance working with national financial authorities on blended finance to maximize alignment; • the need for practical capacity building to help EMDC supervisors engage with blended finance tools and balance their objectives of financial sector stability and achieving the SDGs; and • the complementary role blended finance could play in the COVID-19 recovery efforts for EMDCs, for example in scaling up health security measures.

    Date
    31 Jan 21
    Type
    Implications for Supervisors Toronto Centre
    Region Focus
    Global, Europe and Central Asia, Latin America & the Caribbean, Middle East and North Africa, Sub-Saharan Africa
    Sector Focus
    , Financial Services, General