Sethaput Suthiwartnarueput: Climate risk resilience and sustainable
finance - regulation and supervision
Welcome remarks by Dr Sethaput Suthiwartnarueput, Governor of the Bank of
Thailand, at the ASEAN Core Curriculum on Climate Risk Resilience and Sustainable
Finance, Block 4: Regulation and Supervision, hosted by the Bank of Thailand,
Bangkok, 13 February 2013.
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Dr. Mangal Goswami, Executive Director, The SEACEN Centre
Professor Ulrich Volz, Professor of Economics & Director of the Centre for Sustainable
Finance, SOAS, University of London
Distinguished speakers, and participants
Ladies and gentlemen
First of all, I would like to extend a warm welcome to all participants to the ASEAN Core
Curriculum on Climate Risk Resilienceand Sustainable Finance Block 4: Regulation and
Supervision. It is a pleasant opportunity to finally meet you in person as I believe this is
the first hybrid SEACEN seminarhere since 2020. On behalf of the Bank of Thailand, I
would like to thank the SEACEN centre and the SOAS centre for Sustainable Finance
for arranging the capacity building course on this important and urgent topic in Thailand.
Ladies and Gentlemen,
I am confident that all of us have already acknowledged substantial threat of climate
change posing to society and economy. Central banks and financial regulators in our
region and around the world have put much effort in setting a concrete policy direction
towards tackling climate change. Likewise, the BOT published a directional paper on
Transitioning towards Environmental Sustainability Under the New Thai Financial
Landscape last year to communicate and kick start the journey with our stakeholders. It
is essential for the financial sector to manage climate-related risks, while at the same
time, support the economic transition. This means financial institutions have to
internalize climate considerations into their business operations and risk management
framework and offer financial products and services to help business transition
especially in the high-emission and vulnerable sectors without disrupting the economy
and leaving someone behind.
However, there is no denying that financial sector has substantial gaps and challenges
to overcome in order to achieve such goals, particularly on the risk management
perspective. Financial sector resilience would be undermined by the climate-related
risks without appropriate measures in a timely manner. Thus, central banks and
financial regulators have a crucial role in building capacity and facilitating guidelines
and tools needed for climate-related and environmental risks. The first step should be
providing concrete expectation and guidance for financial industry to uplift their
business operations, risk management, and disclosure that align with international
standards. Simultaneously, the infrastructures and common tools for climate risk
management such as climate scenario analysis, stress test, and climate-related data
must be put in place to create an enabling ecosystem where financial institutions and
regulators could assess and monitor the risks effectively.
Ladies and Gentlemen,
Looking ahead, it is thus inevitable that our regulatory and supervisory frameworks
should take into account sustainability and climate-related factors. The conduct of
prudential framework in this new landscape will arguably be the most difficult task as it
is relatively new and still evolving. In addition, developing economies also have the
distinct contexts and challenges to consider, especially on the expertise, data
availability, and collaboration between public and private sector.
Hence, this course is essential for us SEACEN regulators to understand and identify
our gaps, learn the key rationale why such frameworks and tools are being
recommended and, more importantly, the implementation of cutting-edge practices that
have been tested and adopted internationally. We are greatly fortunate to have such a
prominent list of experts to share their insights and experiences on these topics.
I would like to end my remarks by emphasizing the importance of regulators' capacity
and collaboration. Tackling sustainable finance and climate change is a challenging
process and a long journey that cannot be accomplished by solely single entity. Not
only do financial institutions, but central banks and financial regulators also need to
learn, share, and accommodate these new approaches to ensure sufficient measures
and readiness of the whole financial sector for climate risk management and green
transition. I hope you all have a good learning experience and a successful course.
Thank you very much.