Integrating climate-related risks into micro-supervision This is an ambitious but complex task, on which progress has been made in many countries. Looking at the potential courses of action for supervisors, I believe that our main priority should be the disclosure of existing exposures in the financial sector, what I usually call “the snapshot of risks”. A number of supervisors have paved the way, including the DNB, the Bank of England/PRA and the French supervisory authority (ACPR). The ACPR published last week a second report on the exposures of French banks and insurers to climate risks. This report gives a clearer view on climate risks and opportunities: asset exposures of financial firms to physical risks remains non-material in France  thanks to investments in very low risk zones; banks’ exposures to transitionrelated risks were slightly reduced between 2015 and 2017 and now represent roughly 12% of credit risk’s exposures at default. Our supervisor also has a clearer view on the blind spots in the risk management framework, which must be addressed: executive bodies are committed to embracing further climate risks at the highest level of decision-making but the degree of implication across the French financial sector is still heterogeneous; the granularity of the analysis provided by banks and insurance companies is not sufficient. This step should be widely promoted among NGFS members, who, I believe, need to leverage best practices throughout its membership. I therefore very much welcome the supervisory handbook that will be prepared as a NGFS technical deliverable for 2019-20. b.

Supervisors must ensure that banks improve their operational resilience by strengthening their ability to respond to and recover from cyber-attacks. At a minimum, mitigating cyber threats would require effective collaboration between regulators and the industry, adequate contingency and Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -4-  recovery plans by banks and sound security practices by all participants of financial market infrastructure. In Kuwait, we are in the process of putting in place an advanced platform for effective information sharing about cyber threats that can later be used at the regional level. Supervisors in this regard can leverage CPMI-IOSCO guidance that calls for ‘resilience by design’, encouraging to incorporate sound security features in the system right from its earliest stage of conceptualization. This approach will help address the potential cyber compromises that could stem from banks’ dependence on legacy technologies. To help strengthen cyber resilience of financial institutions, Financial Stability Board (FSB) is currently working on ‘identifying practices to help financial institutions recover from and respond to cyber incidents’. Next year, they are planning to release a toolkit of effective practices that banking industry can use in improving operational resilience against cyber threats. Coping with climate change The second emerging issue warranting our close attention is climate change. According to UN estimates, around 60 million people were affected by extreme weather events in 2018 alone. And within this year, we have witnessed the damaging impact of wildfire in California, hurricane in Bahamas, cyclone in Bangladesh and typhoon in Japan.