finance – similar financial exclusion concerns could also arise. it is important that when we gear towards a greener financial system, we should also have financial inclusion in mind. this is the third role of the financial system that i want to talk about. 21. climate change is one of the most pressing challenges facing the world today. in recent years, we have witnessed increasing frequency and intensity of extreme weather events such as flooding and wildfires. i ’ m sure you still remember the catastrophic damages caused by super typhoon mangkhut just three years ago. 22. in order to tackle the climate challenge, countries agreed, under the paris agreement, to take actions to cut greenhouse gas emission and eventually achieve carbon neutrality within this century. one of the most important steps is to make financial flows consistent with the pathway of lowering greenhouse gas emission. 23. to this end, we are now finalising our supervisory requirements on climate risk management. the requirements will set a benchmark to help banks formulate their plans to upgrade their risk management capability. under the cross - agency steering group, we are also working in the areas of taxonomy and disclosure to increase the consistency of green definitions and the availability of esg information to reduce the risk of “ green washing ”. 24. as the core part of the financial system, banks do have a key role to play in the transition into a low - carbon economy by channelling more financing to greener and more sustainable activities. however, if our path to green finance leads to a rapid off - ramping of “ not - so - green ” exposures or corporates without proper regard to transition needs, this will result in a disruptive transition. and the interim financial exclusion impact on some of the traditional industries could have profound implications for society. 25. we should all be mindful of the very strong need for transition financing, in particular for asia - pacific which accounts for nearly half of global greenhouse gas emission and where the social and economic reality is especially complex for achieving carbon neutrality. hence, green finance is not just about financing green. it ’ s also about financing transition, meaning supporting the “ brown ” industries to adopt greener and more sustainable business models. talent development 26. i have talked about the importance for the financial system to push for technology adoption and green finance with the broader concept of financial inclusion in mind. however, one of the biggest challenges facing banks is shortage of talent. we do need the right talent with necessary skills and know - how to drive the

the situation was not handled promptly, one could easily find that the less defensive customer segments would be locked out of their access to financial services such as loans. 8. that is exactly why governments around the world have launched extraordinary fiscal measures to support those having a tough time. hong kong is no exception. the government has launched the special 100 % sme financing guarantee scheme and 100 % personal loan guarantee scheme to alleviate the cash flow pressures of distressed smes and unemployed individuals. 9. but, apart from fiscal policy, is there any role that the financial system can play? in my view, the financial system can play three key roles. 10. first, the financial system can be more inclusive to help out those in need. the financial 1 / 4 bis central bankers'speeches system plays an indispensable role in channelling capital from those who have a surplus to those who need it. it is important to adopt a mind - set that this intermediation function is not a “ cyclical ” concept. in other words, it ’ s not just for the good times, but also, perhaps more importantly, for the bad times. during a pandemic, a stable flow of credit is a lifeline for many of those who face transient financial difficulties due to extraordinary circumstances. 11. indeed, the past 18 months have provided an empirical test of our ability to maintain the key intermediation role through good times and bad. and i am heartened to say that the banking sector has passed the test in great shape. banks have joined forces with the hkma to introduce a series of relief measures, including the pre - approved principal payment holiday scheme, for their corporate and individual customers. the total amount involved has already exceeded 900 billion hong kong dollars. 12. just a few days ago, we have announced that the payment holiday scheme will be extended for another six months to provide continued support to smes, particularly those in the hardhit sectors. these support schemes should not be taken as just an emergency response designed for addressing the challenge arising from the pandemic. they also reflect our long - term policy thinking regarding the ongoing financial inclusion role that our financial system should play. 13. so, have we done enough in terms of financial inclusion? 14. the pandemic has taught us that we must deepen our commitment to financial inclusion. and we should try to weave that into our financial development objectives going forward. in fact, our ability to enhance the financial inclusion role can be