Currently, they account for almost 40 percent of the Island’s total debt and have been responsible for much of the debt buildup – of the roughly 43 percentage point increase in the debt-to-GNP ratio between 2000 and 2013, the public corporations accounted for almost 85 percent of that increase. BIS central bankers’ speeches  3  Several measures put the Island’s weak fiscal condition into perspective. Total public debt in Puerto Rico is quite high – roughly 100 percent of GNP. This is far higher than in any U.S. mainland state; among the states, the highest ratio is New York at 29 percent.2 However, since most Puerto Ricans do not pay federal income taxes, the large federal debt burden could arguably be considered not to be a burden to Puerto Rico, in contrast to the mainland states. Ranking the states and Puerto Rico with the federal debt burden added for the mainland states, but excluded for Puerto Rico, pushes Puerto Rico down to 14th in the rankings. However, even with this adjustment Puerto Rico still has a high debt burden. In addition to the growing stock of publicly issued debt, Puerto Rico faces large future contingent liabilities via unfunded pension system liabilities. While the Commonwealth has a variety of options for managing these liabilities, they are nonetheless obligations that are relevant in assessing the Commonwealth’s overall balance sheet.

The Bank’s stress test will build on the scenarios being developed by the Network for Greening the Financial System (NGFS) – a coalition of over 50 central banks, representing half of the world’s emissions.11 This spring, the NGFS will make these scenarios open source and publicly available, so that any company, in any sector, can use them to assess their strategic resilience. To embed climate-risk management, we’re encouraging the financial sector and our international peers to: 1. Help shape the climate stress testing framework, which Sam Woods will describe later this morning, by sharing your expertise and responding to the approach that the Bank has put forward in its discussion paper.12 2. Start building capability within your firms. Expertise in managing the physical and transition risks associated with climate change will be a core competency for banks and insurers. 3. Share knowledge and expertise. Climate risk management is a nascent field, and we all need rapidly to improve our skills. That’s why the Bank and the FCA have established the Climate Financial Risk Forum (CFRF) to publish the sector’s collective view of risk management and scenario analysis best practice.13 4. Run stress tests in other jurisdictions. Already, 15 other authorities have committed to run stress tests. Through the NGFS, the Bank of England will share our experience so that others can conduct stress tests for their own financial systems. This will help improve and refine the methodology. 10 https://www.bankofengland.co.uk/news/2019/december/boe-consults-on-proposals-for-stress-testing-the-financial-stability-implications-of-  climate-change. 11 https://www.banque-france.fr/en/financial-stability/international-role/network-greening-financial-system. 12 https://www.bankofengland.co.uk/paper/2019/biennial-exploratory-scenario-climate-change-discussion-paper.