Interview with Stefano Capodagli, Chief Risk Officer at the Caribbean Development Bank: Insights from the 4th International Conference on Financing for Development (FfD4), Seville 2025

Q: Let’s start with the issue of debt. What commitments emerged from the conference?

Capodagli: Debt was understandably high on the agenda. There’s now a clear commitment to “closing gaps” in the global debt architecture. A particularly notable outcome was the endorsement of a UN-led Global Debt Registry, which is a major step toward improving transparency and accountability. While no formal debt relief mechanism was agreed upon, the declaration sets a clear pathway—especially important for developing economies like those in the Caribbean.

Moreover, the launch of the Global Hub for Debt Swaps was a highlight. It promotes instruments such as debt-for-climate and debt-for-development swaps. In crisis contexts, tools like the new Debt Suspension Clause Alliance can allow governments to pause payments during shocks—pandemics, hurricanes, climate disasters. That flexibility can be lifesaving for vulnerable economies.

Q: Climate finance remains a critical issue. What did the conference deliver on this front?

Capodagli: There was progress, but also compromise. The final declaration affirms climate justice principles, particularly Common But Differentiated Responsibilities (CBDR), which is essential for the Global South. It also encourages climate finance scaling, especially concessional instruments like green bonds and climate-aligned debt products.

However, the U.S. withdrawal meant some ambitious climate finance language was removed from the final text. So, while the political endorsement of climate-aligned innovation is welcome, the declaration lacks binding financial targets—which is a missed opportunity given the urgency.

Q: Tax reform is always complex. What direction did the conference take on international taxation?

Capodagli: The conference promoted international tax cooperation, with an emphasis on the digital economy and multinational corporations. However, the measures remain non-binding, which limits their impact. There were modest references to gender-responsive and wealth taxes, but without concrete frameworks.

Interestingly, some countries introduced a solidarity tax on premium air travel and private jets to fund climate initiatives. That’s symbolically strong and aligns with calls for fairer taxation, but we need broader systemic change. The commitment to fight illicit financial flows and build a UN-led cooperation framework is a step in the right direction.

Q: What role did Multilateral Development Banks (MDBs) play in the outcomes?

Capodagli: MDBs made bold pledges—they aim to triple their financing to developing countries. That’s ambitious, though the details remain vague. As someone deeply involved in development finance, I welcome their emphasis on blended finance, hybrid capital, and balance sheet optimization.

Instruments like SCALED, FX EDGE, and Delta are designed to attract private capital to development priorities. These innovations are critical for regions like the Caribbean, where mobilizing private investment alongside public resources can create lasting impact. But execution and follow-through will be key.

Q: Were there any important discussions on health and global public goods?

Capodagli: Yes, the declaration recommits to universal health coverage and pandemic preparedness—an area where many countries still face huge gaps post-COVID. It also supports vaccine equity and education. These are foundational investments in human capital and social resilience.

Q: Finally, how does the declaration ensure accountability?

Capodagli: The implementation section is perhaps the most forward-looking. It proposes a biennial reporting framework with stakeholder participation and transparency. National and regional development banks are encouraged to align with these global goals. Crucially, ECOSOC will monitor progress, which keeps the momentum anchored in the UN system.

Q: With over 30 years at the forefront of international finance and development leadership, what’s your takeaway from FfD4?

Capodagli: The Seville Declaration is not perfect, but it is a solid foundation. It reflects the geopolitical realities of today, yet still outlines a cooperative vision. For institutions like the Caribbean Development Bank and advisory networks like Agile Development Consulting, this roadmap provides both challenges and opportunities.

We now have clearer signals on debt reform, climate alignment, and private sector mobilization. The next step is implementation—and that’s where leadership, trust-building, and innovation will make all the difference.

Q: Mr. Capodagli, based on your experience across public, private and multilateral finance—how do you see the future of finance for development evolving?

Stefano Capodagli: Finance for development is at a crossroads. The traditional paradigms—where public institutions led and private capital followed cautiously—are no longer sufficient. We are now entering an era where success will depend on true integration: between public and private, global and local, financial innovation and developmental accountability.

I believe the future lies in building adaptive financial ecosystems. These must be capable of responding not just to economic volatility, but to climate shocks, geopolitical shifts, and societal demands for equity and inclusion. Finance must become more agile, more inclusive, and more mission-driven.

Three trends are particularly decisive in my view:

1. Blended and catalytic finance: Development banks must act as system orchestrators—de-risking investments, crowding in private capital, and aligning incentives around long-term impact, not just short-term return.

2. Digital and data transformation: Digital infrastructure, AI, and financial technologies will reshape not only delivery mechanisms but also transparency, monitoring, and participation in financing processes—especially in underserved markets like MSMEs or climate-vulnerable communities.

3. Governance and trust: Without stronger, more transparent governance models—rooted in participation, accountability, and trust-building—no financial innovation will be sustainable. Inclusion must be structural, not symbolic.

Ultimately, the future of finance for development will be defined not just by technical tools or financial products, but by values. Solidarity, resilience, and shared responsibility must be the compass. As professionals and institutions, we have the opportunity—and obligation—to reimagine finance as a lever for systemic transformation. That is the horizon I work toward.

Interview conducted by Agile Development Consulting, July 2025.