The regulatory framework is not up to the challenge. It is being reformed in several European countries. But the road is still long and the horizon of European harmonization even longer, but there is still hope. Here are some developments that could warm it up.

National financial sector supervisors could encourage the purchase of responsible assets or the refinancing of bank credits granted for responsible investments. According to this logic, the Basel regulations could, for example, reduce the impact of their recognition as equity in balance sheets. In the Basel regulation, goodwill must be removed from regulatory capital, which makes the recognition of virtuous goodwill unattractive to banks or large investors. Supervisors would be well advised to promote virtuous goodwill through an exemption measure.

The recognition of responsible certifications associated with financial instruments could provide them with advantages allowing for a better valuation. Our civil servants will not lack the creativity to imagine the incentive tools they could use.

Supervisors could agree to harmonize green/responsible/sustainable certifications at least at the European level, for example by moving closer to the ICMA or GRI standards.

In our societies, the power to govern is political in nature. It sets the framework and orientations. Today, the piling up of administrative layers, from Europe to the territories, goes far beyond these prerogatives. The conditions for the emergence of an efficient and responsible financial market will only be met when it is driven more by liberal forces than by public infusions. The regulatory system must be the arm of the policy of liberalizing this market, whose dynamics will contribute to both budgetary savings and the achievement of sustainable development objectives.

However, by accompanying these adaptations of the European regulatory environment, the way out of the impasse of responsible financing remains the creation of a true responsible finance market.
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