for Fairness and client protection in finance Which

for Fairness and client protection in finance Which role do investors play? Oleg Ivaniychuk, Finance in Motion AMFA Investors Fair, Baku, 4 October 2011

for First of all we are not “just pure” liquidity providers and we are not perceived as such by our investors.

for What does Responsible Finance mean for an investor? Ensure the promotion of responsible finance practices at all levels of the financial system: § End-borrowers § Financial institutions § Financial sector: regulators, mass media etc. § Investors

for Educating end-borrowers brings benefit to both sides of the Balance Sheet Educated clients, who understand the products they buy, usually are less risky and more stable. Better risk profile on the asset side transforms into better conditions and broader choice on the liabilities side. But what can investors do at the end-borrower level?

for Educating end-borrowers brings benefit to both sides of the Balance Sheet But what can investors do at the end-borrower level? Promote financial literacy • Build public understanding on financial concepts Support meso-level institutions • For example, by providing technical assistance to the setting-up and development of debt advice centers Promote Client Protection Principles • Endorse the Smart Campaign and its 6 principles

for Risks decrease when fair banking is ensured What can investors do at the financial institutions level? Establish long-term partnerships vs. quick deals Promote sound environmental and social management Do not refinance consumer lending Promote the use of cash-flow based lending technologies Offer financial instruments in local currency Promote responsible financial products for clients Strengthen internal capacity of partner institutions though TA like credit risk management including RF aspects

for Spread the importance of Responsible Finance practices is imperative What can investors do at the financial sector level? Raise awareness of Responsible Finance among the public • Promote Responsible Finance events (KOS, AL, SRB, GE) and sponsor booklets Conduct research on Responsible Finance practices • Addressing client indebtedness (Bi. H, KOS, AZ) and FX risks Improve infrastructure: setting up credit bureaus Invest prudently and avoid overheating of markets Support savings mobilisation

for Collaborative approach to settle the example What can investors do together? Responsible transparent products for our partner institutions (pricing, repayment schedules) Ensure fair play/fair competition Transparency and disclosure of information Collaborate in restructuring and work out of problem cases Promote dialogue on Responsible Finance with regulators and other investors

for To the end let us finish where we started: Ensure the promotion of responsible finance practices at ALL LEVELS of the financial system: § End-borrowers § Financial institutions § Financial sector: regulators, mass media, etc. § Investors

for is signatory of and implements: Principles for Investors in Inclusive Finance and participant in: Thank you for your attention! Oleg Ivaniychuk Investment Manager E-mail: o. ivaniychuk@finance-in-motion. com Phone: +49 (0)69 977 876 50 60 10