To a large extent, international monetary arrangements, as well as current account imbalances, are the by-products of policy choices made by countries on their capital account regimes and financial development. Here, I will focus on three topics: global imbalances, the provision of international liquidity and the newly emerging question of an international store of value. These are issues of joint and common interest for all countries, Getting to a common understanding on those matters would help in making progress on other, more contentious questions, such as exchange rates regimes. Global imbalances and the policy agenda Current account imbalances have increased both in amplitude and durability during the last decade. In fact, they have become a permanent characteristic of our economic environment. Contemporary analysis point to “structural” causes behind the pattern of capital flows and global imbalances:   According to the “Bretton Woods II” approach (Dooley et al. 2003, 2008, 2009), the pattern of capital flows results from a mutually beneficial equilibrium between two groups of countries. On the one hand, emerging economies which follow an exportled development strategy and seek to prevent appreciation of their real exchange rates by constant foreign exchange intervention (together with capital controls). As a consequence, they accept to accumulate increasing stocks of liquid assets denominated in dollars. On the other hand, the US is happy to get both reserve inflows to finance their deficits and cheap imports to fuel their demand for consumption goods. Such equilibrium is stable by virtue of the mutual benefits it brings to both groups.

The economics of climate change are more complex with feedback effects, nonlinearities and massive uncertainty that will require substantial investments to understand.11 Third, financial markets and institutions face the potential for a “Minsky moment” related to climate change—an abrupt repricing of assets in response to a catastrophic event or change in investor perceptions.12 Financial firms and supervisors need to consider the potential and impact of this type of sudden event. Conclusion In closing, the impact of climate change on the structure and performance of the economy and the financial sector is happening now and will continue. Conferences like this certainly help to further our awareness and understanding of this critical issue. I am confident that risk managers and central banks will continue to invest and build capacity to understand and mitigate these risks in order to make the financial sector more resilient. I look forward to hearing the insights from across the financial sector in the remainder of this conference. Thank you for your attention. 1 3/4  BIS central bankers' speeches  1 U.S. Global Change Research Program, “Fourth National Climate Assessment: Volume II: Impacts, Risks and  Adaptation in the United States,” Washington USGCRP, 2018. 2 Governor Mark Carney, Bank of England, “Breaking the Tragedy of the Horizon – Climate Change and Financial  Stability”, Sept. 2015. 3 Governor Lael Brainard, Federal Reserve Board of Governors, “Why Climate Change Matters for Monetary Policy  and Financial Stability”, Nov. 2019.