The European Bank for Reconstruction and Development (EBRD) has introduced a new Approach to Financial Market Development, outlining its strategy to strengthen domestic financial markets and support sustainable economic growth across its countries of operation.
The newly published framework highlights the importance of deep, resilient, and well-functioning financial markets as a foundation for private-sector-led economies. According to the EBRD, robust financial systems play a crucial role in allocating capital efficiently, supporting business investment, and promoting long-term economic development.
Aligned with the bank’s Strategic and Capital Framework 2026-2030, the approach emphasizes the role of local financial markets in improving economic governance, enhancing transparency, and strengthening corporate accountability. Strong domestic markets also help improve monetary policy effectiveness and provide businesses and investors with better tools to manage financial risks.
The EBRD notes that expanding local currency financing is a key objective of the new strategy. By reducing dependence on foreign currency funding and external capital inflows, countries can improve economic stability and become more resilient to global financial shocks.
Another major focus of the framework is mobilizing long-term private investment. Well-developed local financial markets create opportunities for institutional and private investors to participate in economic development while diversifying sources of funding for businesses and infrastructure projects.
The bank’s leadership described financial market development as a system-wide priority that supports broader economic transformation. Through a combination of investments, technical assistance, and policy engagement, the EBRD aims to address barriers that limit market growth and encourage greater private sector participation.
Founded in 1991, the EBRD has spent more than three decades supporting financial sector development across multiple regions. The new strategy builds on that experience and reflects lessons learned from past economic crises, with a focus on strengthening market resilience, promoting local currency markets, and driving sustainable economic progress.
As countries face evolving economic challenges, the EBRD believes stronger domestic financial markets will be essential for improving access to capital, enhancing stability, and supporting long-term growth.
