Singapore aims to peak its carbon emissions around 2030 and achieve net zero as soon as viable after 2050. Climate change presents two significant risks to the financial system. Physical risk arises from the impact of climate-related natural catastrophes and widespread environmental degradation. Transition risk arises from the process of adjustment to an environmentally sustainable economy, including changes in public policies, disruptive technological developments, and shifts in consumer and investor preferences. At the same time, the financial sector plays a key role in the fight against climate change. Finance is key to unlocking a sustainable future. It can support the transition to a less carbon intensive economy and channel capital to green technologies and infrastructure. This is why MAS is incorporating climate change and environmental sustainability across all its functions. As central bank and financial regulator, MAS is working with financial institutions to strengthen the Singapore financial sector’s resilience against environmental risks. 1/9  BIS central bankers' speeches  As promoter of Singapore as an international financial centre, we are working with financial institutions to develop a vibrant green finance ecosystem to support Asia’s transition to a low-carbon future. As the guardian of Singapore’s official foreign reserves, MAS is integrating climate risks and opportunities into its investment framework. As an organisation, MAS is reducing its own carbon and environmental footprint to support Singapore’s broader climate ambitions and commitments. A FINANCIAL SECTOR RESILIENT AGAINST ENVIRONMENTAL RISKS Let me begin with strengthening financial sector resilience against environmental risks.

In the early years, the principal substance of monetary policy making was not centralized around a table in Washington, but was conducted by the individual Reserve Banks, which set the discount rate for their member banks and conducted open market operations. At inception, the Fed was set up with financial independence and not reliant on annual appropriations by the Congress. Its capital was provided by the member banks and its resources were to come principally from earnings on its assets and the services it provided its member banks. In formal structure, therefore, and to a considerable extent in fact, the Fed was established with a substantial degree of both “goal independence” and “instrument independence.” The very general framing of the initial mandate – “to furnish an elastic currency” – gave it considerable scope to decide what objectives should guide monetary policy. It had full authority to decide how to pursue those objectives. It had broad independence both to formulate and to execute monetary policy. That independence was qualified for substantial parts of the early history of the Fed by the requirements of the gold standard and the exigencies of war. But even apart from those constraints, in practice the Fed operated with less independence from the Government than this structure appeared to provide. In the Fed’s first two decades, the presence of the Secretary of the Treasury and the Comptroller of the Currency on the Board of Governors gave the government a substantial degree of influence over monetary policy.