Central banks are also keeping an eye on developments in the markets and in the new financing instruments now emerging, in order to understand how the transition is being financed. Indeed, allow me to focus the rest of my address on the work of central banks, since the last five years have seen a considerable expansion in the areas of work incorporating analysis of climate risks and the development of sustainable finance. Network for Greening the Financial System A case in point is the creation of the Network for Greening the Financial System (NGFS), a group of central banks and supervisors set up in late 2017. Its aims are to contribute to the development of environment and climate risk management in the financial sector, share best practices, perform analytical work and mobilise finance to support the transition towards a sustainable economy. The network is working to incorporate climate-related issues into a range of areas, such as financial supervision, the development of climate scenarios, the inclusion of climate-related issues in the monetary policy framework, the integration of sustainable investment principles into own portfolio management, awareness-raising and, needless to say, environmental management within the institutions themselves. The growing number of subject areas in recent years, and the network’s burgeoning membership, clearly testifies to the increasing engagement of central banks. Compared with the initial group of eight central banks and supervisors,6 the network is now home to 121 institutions and 19 observers from all five continents.

7  According to data from the Home Mortgage Disclosure Act, there were 31.8 million refinancings of first-lien single-family mortgages over 2008–2013, with an average (median) loan amount of $ $  8  For evidence on the importance of capacity constraints for time-varying margins in mortgage pricing, see Fuster, Goodman, Lucca, Madar, Molloy and Willen, 2012, The Rising Gap between Primary and Secondary Mortgage Rates, Federal Reserve Bank of New York Economic Policy Review, 19(2), pp. 17–39. 9  This is documented for instance in another paper presented yesterday, by Andersen, Campbell, Meisner, Nielsen and Ramadorai (2015), “Inattention and Inertia in Household Finance: Evidence from the Danish Mortgage Market”. 10  For evidence that lenders are less willing to originate FRMs if mortgage securitization markets are illiquid or frozen, see Fuster and Vickery (2015), “Securitization and the Fixed-Rate Mortgage”, Review of Financial Studies, 28(1), pp. 176-211. Research presented in yesterday’s academic sessions finds that a bank’s access to external bond finance influences the composition of mortgages it originates: see Foá, Gambacorta, Guiso and Mistrulli (2015), The Supply Side of Mortgage Finance. 11  One proposal for such innovation that would have increased pass-through during the crisis is the “automatic stabilizer mortgage” of Eberly and Krishnamurthy, 2014; see http://www.newyorkfed.org/research/conference/2015/mortgage_design/Eberly_Janice_052015.pdf. BIS central bankers’ speeches  3  foreclosures, and associated credit losses. But a number of proposals have argued that mortgage balances should be explicitly indexed to movements in home prices in some way. 12 I hope I have whetted your appetite for today’s events.