the result of large purchases of sovereign bonds by Asian central banks and oil- exporting countries. Depending on which hypothesis is true, the implications for the monetary policy are different. If the long-term rates go down as a result of poor growth prospects, the current short-term interest rates should be lowered respectively so as to prevent possible deflation. If, however, specific factors related to globalisation or decrease in the risk premium are the cause of persisting low long-term interest rates, the short-term interest rate should be higher in order to achieve appropriate restrictiveness of the monetary policy  24  See Corbo V., Landerretche O., Schmidt-Hebbel K. “Does Inflation Targeting Make a Difference” in: N. Loayza and R. Soto (red.) “Inflation Targeting: Design, Performance, Challenges” (Central Bank of Chile: Santiago 2002). 25  Gürkaynak R.S., Levin A.T., Marder A.N., Swanson E.T. “Inflation Targeting and the Anchoring of Inflation Expectations in the Western Hemisphere”, forthcoming in Mishkin, Frederic and Klaus Schmidt-Hebbel (red. ), Series on Central Banking, Analysis and Economic Policies X: Monetary Policy under Inflation Targeting (Santiago, Chile: Banco Central de Chile), 2006 and Gürkaynak R.S., Levin A.T. Swanson E.T. “Does Inflation Targeting Anchor Long-Run Inflation Expectations? Evidence from Long-Term Bond Yields in the U.S., U.K., and Sweden”, Federal Reserve Bank of San Francisco Working Paper 2006-09, March 2006. 26  For example a question whether monetary policy should burst asset bubbles was hotly debated during the large European Central Bank conference on 16 to17 March 2006.

Remarks given at a panel to launch the third annual America’s Pledge report, at the 25th Annual Conference of the Parties Mark Carney Governor of the Bank of England  US Climate Action Centre, Madrid 10 December 2019  I am grateful to Jennifer Nemeth for her assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Introduction The Accelerating America’s Pledge report comprehensively documents the scale of change that is needed across our economies to put emissions on a trajectory consistent with building a net zero economy. That will require a more sustainable financial system. Changes in climate policies, new technologies and growing physical risks will prompt reassessments of the values of virtually every financial asset. Firms that align their business models with the transition to net zero will be rewarded handsomely. Those that fail to adapt will cease to exist. Now is the time to ensure that every financial decision takes climate change into account. For that change to happen, we need to focus on the three Rs – reporting, risk management and return. First, reporting In 2015, G20 leaders tasked representatives from the public and private sectors to review how the financial system takes into account climate risks. We established a Task Force on Climate-related Financial Disclosures (TCFD), chaired by Mike Bloomberg. Four years on, the TCFD has generated a step change in both the demand for and supply of climate reporting. The demand for TCFD disclosure is now enormous.