In May this year parliament passed a new Central Bank Act with the approval of all 56 members who were present for voting on the bill. A detailed account of the main changes from earlier legislation has been given in the Central Bank’s publications. See i.a. the Central Bank of Iceland’s Monetary Bulletin 2001/3 I shall only mention here that a single target was set for the Central Bank, i.e. to promote price stability. With the Prime Minister’s approval, the Bank was also authorised to specify a numerical inflationary target. The Bank was granted full independence to apply its instruments in order to achieve its main objective. Its financial independence was increased by precluding in law treasury access to short-term funding with the Central Bank, which had previously been precluded with an agreement between the Minister of Finance and the Bank. Provisions on transparency and accountability towards the Government and general public were made more focused. As I mentioned before, one of the Central Bank’s main objectives is to contribute towards an active and secure financial system, or financial stability as it is often known. In recent years central banks in many countries have been increasingly devoting themselves to monitoring financial stability. This development is partly the product of financial market liberalisation and the deregulation of capital movements, and partly a response to shocks which have struck many countries, both currency shocks and banking system setbacks.

This will ensure investors know how much utility companies are investing in low carbon alternatives. And what progress car manufacturers are making towards fuel efficiency. Scenario analysis  The recommendations recognise also that static disclosures of current carbon footprints will not be sufficient to reveal a company’s climate-related financial risks and opportunities. For investors to price financial risks and opportunities correctly, they need to weigh firms’ strategies against plausible public policy developments, technological advances and evolving physical risks and opportunities. In a ground breaking innovation, the Task Force recommends that companies explore and disclose the potential impacts of climate-related risks and opportunities on their businesses, strategies and financial planning under different potential future scenarios. A full exploration of transition risks may require consideration of financial risks and opportunities under several scenarios, which firms may develop directly or using commonly available models. Reflecting the commitments made in Paris, the Task Force recommends that this should include using a 2-degree scenario. And consistent with the concept enshrined in the Paris Agreement of common but differentiated responsibilities, transition scenarios could take account of different national targets for emissions reduction. This makes them particularly useful for companies headquartered in emerging economies. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  Over time, the Task Force expects to see a greater emphasis on quantitative analyses in scenario-related disclosures, including the underlying assumptions associated with the climate-related scenarios used. Scope extends to asset owners and managers.