11th Annual ICMA Conference of the Principles - CEB Governor Monticelli's keynote address: “Value, values and GSS bonds. Insights from Europe’s social development bank” (Tokyo,[...]

As prepared for delivery

I am honoured and delighted to speak today before such a distinguished audience.

At the outset, I would like to thank the International Capital Market Association (ICMA) and, in particular, its Chief Executive Bryan Pascoe for inviting me to address the Annual Conference of the Principles.

This yearly appointment is a particularly important milestone in the activities of ICMA. It is the occasion when ICMA convenes all the relevant stakeholders to ensure that the fundamental criteria underpinning the functioning of international capital and securities markets are appropriate for their successful operation.

"Successful operation" is a very charged and dense expression, as it encompasses two different and equally important domains: i) the technical domain of efficient, resilient and transparent modus operandi of day-to-day activities; ii) the societal domain, which is when capital markets succeed in promoting both the economy-wide efficient allocation of resources and the consistency between the individual market participants' search for value and the values of an inclusive society as a whole.

My remarks today are focused precisely on this second issue - which is more relevant than ever, given the momentous transformations that are affecting our societies with an unprecedented speed.

Specifically, I intend to highlight the contribution that a properly-organised and transparent market for Green, Social and Sustainability bonds - GSS bonds - can give to harness private resources and lead to outcomes that allow societies to thrive and maintain cohesion. And this is no small feat, given the upheavals generated by the need to cope with climate change and the disruptive introduction of digital technology - the latest and most powerful of which is artificial intelligence.

The core idea underpinning the function that GSS securities can perform is straightforward: by providing investors with accurate and reliable information on the use of the security proceeds, this particular asset class allows market participants to make informed choices on the way they intend to reconcile the risk-return features of their investment (their search for value leading to efficiency) with the societal objective of the projects they finance (the attention to "values" in their behaviour).

Value and values are not in contradiction. Private self-interest and society's welfare are complementary, as Adam Smith - who was a moral philosopher; economists were not yet around - famously propounded.

Straightforward. Simple and profound. Clear and direct. Yet, as we know, not at all obvious to implement on its own. To make GSS bonds play their intended role, a proper market must be established. And this requires laws, regulations and principles.

Clearly, the overarching responsibility for underpinning an appropriate legal and regulatory framework to make the GSS market viable and capable of discharging its special function lies with the official sector.

In the case of the GSS space, this general remark comes with a particular connotation. The role of GSS securities in promoting the reconciliation of value and values - of private risk-return assessments and the attainment of the common good - often hinges on appropriate norms which ensures that - to use the jargon of economists - "externalities are internalised", in other words, that the distorting wedge which may be present between monetary and social returns is dealt with appropriately.

Equally important is the role of suitable principles in underpinning the transparency and reliability of the GSS market.

This is where the role of ICMA is of the essence. ICMA is the key convenor of all the relevant stakeholders. Even more importantly, it promotes a working method which: i) gives voice to everyone who has something to contribute; ii) fosters a synthesis of the various inputs; iii) translates shared conclusions into principles which can guide market participants' behaviour; and iv) monitors the relevance of the principles, updating them to respond to new circumstances.

This way of working does deliver, as we see in practice every day.

Against such a backdrop, I am very proud to note that the Council of Europe Development Bank - the CEB, the oldest Multilateral Development Bank after the World Bank and the only one with an exclusively social mandate - has been a pioneer in the GSS space. Indeed, the CEB is one of the founding members of the ICMA Social Bond Working Group formed in 2016 and a regular issuer of Social Inclusion Bonds, fully aligned with ICMA's Principles.

This longstanding and very fruitful cooperation between ICMA and the CEB has continued over the years - pari passu with our growing footprint as issuer in the GSS space. Earlier this year, it was crowned with the election of the CEB to the ICMA Executive Committee of the Principles, joining 24 other leading institutions.

This recognition reflects the CEB's long-standing leadership in the market, and we look forward to deepening our collaboration and further emphasising social considerations across the Principles.

Allow me to elaborate a bit more on the CEB. The CEB finances investments in critical social sectors - such as education, healthcare, and social housing - across its 43 countries in Europe, including Ukraine, our newest member. In 2024, the CEB financed 44 new projects across 22 member countries, for a total of 4.5 billion euros.

The CEB focuses on the promotion of social cohesion and the objective of leaving no one behind. For this reason, at the CEB, we are convinced that climate action needs to go hand in hand with social considerations and we are determined to support a just transition.

Delivering on our social mandate in practice provides the kind of impactful operations that are necessary to make the GSS market useful and credible. It allows the CEB to lead by example with the transparency and accountability of our GSS issuance.

Last year, the total issuance of Social Inclusion Bonds by the CEB surpassed the 10 billion-euro milestone and now exceeds 13.5 billion euros.

As a frequent and committed issuer, the CEB has been diversifying its Social Inclusion Bond issuances from euros and US dollars to Australian and Canadian dollars, Swedish krona, Norwegian krone, and British Pounds, to meet growing demand from investors and advance this market internationally.

The bond denominated in Australian dollars, in particular, stands out because of the very strong participation of Japanese investors, highlighting that the Asia-Pacific region is rapidly emerging as a strategic growth market for sustainable finance.

The CEB is constantly seeking ways to enhance transparency and integrity in its sustainable issuance. This effort is widely recognised: indeed, in 2023, the CEB was awarded "Best ESG Issuer" and "Social bond of the year"- a feat it repeated in 2025.

Let me share one additional thought. As Chair of the Heads of Multilateral Development Banks Group this year, the CEB has also worked to support more transparency and promote a better understanding of how the financial models of multilateral development banks operate. In this context, in September, they jointly published the first-ever Comparison Report, setting out their key financial indicators.

To conclude: our societies are confronted with several momentous and interconnected challenges. The importance of a more inclusive and sustainable financial system - one that harmonises the search for value with public good - has never been greater. This is not merely a technical matter. It is an ethical imperative. It is a shared responsibility.

ICMA's convening power and the spirit of collaboration it fosters are vital to this mission. The CEB is proud to contribute to this effort: building financial markets that do more than allocating capital efficiently. Markets that rise to our collective challenges and help shape a future for all, which is more sustainable, more inclusive and more resilient.