Carlos Torres Vila (BBVA): “The developed world must be bolder in its financial support to developing countries”
According to the BBVA Chairman the upcoming Glasgow Climate Summit (COP26) is the most important one since Paris in 2015. For this reason, on Friday he called for “commitments and credible actions” by governments and the private sector to curb emissions by 45 percent by 2030. Carlos Torres Vila pointed out that “faced with the decarbonization challenge, emerging economies should be among those leading the race:” And, for this to be possible, developed countries "should support emerging countries in their journey to decarbonization with more financing" he said speaking at the annual meeting of the Institute for International Finance (IIF).
During his speech, Carlos Torres Vila discussed the two structural trends in the financial sector today: the fight against climate change and digitization. In his view, delivering on the net-zero goal by 2050 will require everyone’s commitment, from the public to the private sector, both in developed countries and, especially, in emerging countries. However, the BBVA Chairman stressed developing nations lack resources and support: “The fight against climate change requires huge amounts of investment. That is the true challenge that lies ahead,” he stressed.
In 2009, during COP15 in Copenhagen, developed countries agreed to mobilize $100 billion annually for mitigation and adaptation action in developing countries by 2020. However, “twelve years later, developed countries continue to fall short,” noted Carlos Torres Vila. For this reason, he underscored that the upcoming COP26 in November “represents a great opportunity to set the basis to move from words to action in supporting emerging countries in their journey to decarbonization.”
This transformation towards a greener economy also requires properly-functioning carbon markets. "Fair carbon pricing is the best tool to provide incentives to develop and deploy clean technologies," said Carlos Torres Vila. Public policies would complement private markets to correct potential market failures. Thus, in this context, Global coordination between the public and private sector is paramount.
Carlos Torres Vila, BBVA Chairman - BBVA
“We now have an opportunity to help our clients make better decisions around money.”
The BBVA Chairman emphasized that we live in an age of disruption driven by technological change and accelerated by the COVID crisis. Emerging technologies, such as artificial intelligence or the cloud share a common factor: the data revolution. While the importance of data is not new and banks have always managed huge swaths of data, the insights that can be drawn today from data thanks to AI can make a real difference in the way people save, invest, curb expenses, or change their habits to achieve a goal.
In this context, banks “have the opportunity to make a positive impact on the lives and businesses of our clients,” said Carlos Torres Vila.
For all this to be possible, we need a regulatory and supervisory environment that promotes innovation and, at the same time, guarantees financial stability. Carlos Torres Vila urged regulators and supervisors to act as drivers of these changes. Among the key regulatory aspects, he mentioned a consistent regulation across countries and sectors.
In particular, he mentioned cross-sectoral user data sharing, clarity on requirements for different AI; as well as the necessary regulations for bigtechs and fintechs.
Finally, the BBVA Chairman weighed in the role that banks should play in the post-COVID recovery. In his opinion, after a period during which banks have helped society to cope with the impact of the crisis, in coordination with public authorities, the challenge in Europe now is to help authorities to ensure that the European recovery funds reach everyone. For Carlos Torres Vila, it is essential that authorities take advantage of private capital and help on the path towards a green, inclusive and digital economy. In this sense, "banks will be key during the recovery phase in Europe, especially helping public authorities to channel and amplify the impact of NGEU funds,” he said.