The "Fintech and Green Finance" Roundtable Discussion, jointly hosted by the Paulson Institute and the Center for Finance and Development of the National Institute of Financial Research (NIFR) at Tsinghua University, took place in the afternoon of March 22 in Beijing. This meeting was a part of the green finance conference series jointly hosted by the two parties. Henry M. Paulson Jr., former Secretary of the Treasury of the United States and Chairman of the Paulson Institute, attended the event and delivered a keynote speech. Ma Jun, Director of the Center for Finance and Development of NIFR, and Deborah Lehr, Vice Chair of the Paulson Institute, also made the opening address. The meeting was hosted by Ma Jun and Sun Rui, Senior Advisor at Paulson Institute.
The discussion focused on the opportunities, challenges and development trends in green finance driven by fintech innovations, and policy guidance and innovations to propel fintech sustainable development. More than 50 senior officials and experts from financial institutions home and abroad joined the discussion.
Henry Paulson stated that fintech innovations can create a more efficient and more inclusive financial system. The emergence of long-distance banking services enables more people to participate in the financial activities. Due to the decreasing demand of paper receipts or even physical currency, and the decreasing need to drive to the bank to obtain financial services, long-distance banking, in essence, is green and environmentally friendly. He also stressed that although fintech can bring forth major opportunities, the accompanying risks also demand attention. International financial supervisory bodies and governments must be ready to resolve governance issues alongside with the fintech revolution. He believes that the balance between fintech innovation and financial supervision is of great importance. Financial supervisory bodies have to ensure financial markets’ transparency and ascertain market competitiveness while protecting investors and consumers and maintaining market stability. The even bigger challenge lies in constructing an effective policy framework, which can simultaneously promote fintech growth, resolve inherent risks in finance digitization and transformation, and propel the sustainable development. Paulson believes that China has sufficient capacity to handle the mentioned challenges.
Ma Jun introduced the three main research subjects for the G20 Sustainable Finance Research Task Force in 2018: sustainable asset securitization, developing sustainable private equity and venture capital, and utilizing fintech to promote sustainable finance. He pointed out that one of the prominent challenges of green finance is the need to identify green assets, track their usage and assess their environmental value, which means additional costs for the borrower, issuer or investor. For instance, additional accreditation cost for green bonds is one of the reasons why many issuers are unwilling to issue green bonds. Ma Jun believes that in order to drive the continual and rapid development of green finance, sole reliance on governmental subsidy is inadequate, and it is necessary to employ fintech measures like big data, artificial intelligence, Internet of Things and blockchain to reduce extra costs.
Deborah Lehr stated that fintech is imposing revolutionary changes in the financial industry and environmental and sustainable development. She added that the Paulson Institute will continue its focus on the fintech field and study how fintech could promote green finance development, including how to identify and define "green" in the business sector, how to use fintech measures to stimulate innovation in financing products to drive green development among enterprises, and to explore a feasible path to promote economic growth and sustainable development.
Representatives also engaged in deep discussions on "application of fintech drives green finance development" and "fintech fosters policy guidance and innovation in sustainable development". The experts believe that fintech measures could effectively improve the capacity to identify greenness and avoid problems such as "faked" or "mimicked" greenness. In particular, such measures could find application in greenness rating and credit investigation for small-sized or micro enterprises, and help reduce costs related to green credit investigation. At the same time, cutting-edge technology as artificial intelligence, big data and blockchain could improve the data availability and transparency, supplement the deficiency of climate data or carbon data, and assist financial institutions in their decision-making process. Government could encourage more enterprises to disclose more information and encourage information sharing, to construct a suitable policy framework to promote fintech in the advancement of sustainable development.
The Center for Finance and Development of the National Institute of Financial Research at Tsinghua University emphasizes the principle of solving practical problems related to the economy and finance, focuses on the objective to serving and facilitating financial decisions, strives to become a key think tank in the finance sector, and takes an active role in promoting international exchanges in the economic and financial sectors. Other than performing independent studies on mid- and long-term issues, the Center for Finance and Development also accepts research topics commissioned by the government, financial supervisory bodies and financial institutions, and actively partakes in and supports the People's Bank of China's studies in fields such as green finance, G20, monetary policy and financial risks. Key research topics for the next few years include financial risks, monetary policy, green finance, the "Belt and Road" and inclusive finance.
