On the regulatory side, SBP has issued Green Banking Guidelines in 2017, with the objective to: (i) reduce vulnerability of financial institutions from risks arising from the environment, (ii) facilitate and push banks to fulfill their responsibilities for the protection of environment, and (iii) ensure required financing is made available for transformation into resource efficient and climate resilient economy.
In an environment of above trend growth in the world economy, unusually low volatility in financial markets and strong profitability in banking systems in most countries, investors have been prepared to purchase risky assets at relatively high prices in 2005.