that encompasses green and transition activities. it adopts a “ traffic light ” system that helps market participants identify activities that are “ green ”, “ yellow ” ( or transition ) and “ red ”, with the intent of reaching net 1 / 2 bis central bankers'speeches zero as soon as possible. the calibration of thresholds is important, considering the feasibility and availability of alternative technologies in singapore and the region. the thresholds will need to be recalibrated at regular intervals to keep pace with technological innovations. second, innovative financing solutions. to meet asia ’ s green financing needs, it is not enough to rely on just the public sector or the banking sector. we need innovative platforms to catalyse capital flows to marginally bankable but worthy green projects. in singapore, one of our sovereign wealth funds, temasek, has partnered hsbc to set up a debt financing platform to invest in marginally bankable sustainable infrastructure projects in asia. we need new instruments such as blended finance to draw in different types of financers. government agencies and multilateral development banks can potentially help to derisk sustainability projects by taking on first loss equity or providing a guarantee, to help crowd - in more private sector financing. this includes not just commercial banks but also capital providers such as foundations and family offices. we need to deploy technical assistance alongside financing. this is to support a range of activities such as project preparation, project implementation, and even training and capacity building to achieve maximum development impact. third, financial supervision. regulators are in a strong position to steward the financial system towards net zero through supervising financial institutions ’ management of climate related risks. the network for greening the financial system, or ngfs, plays a key role in helping to mainstream climate - related risk management. the ngfs has just issued a report highlighting the different paths that supervisors can take towards a set of internationally aligned supervisory practices. we strongly support the ngfs declaration1 to green the financial system. the mas is progressively embedding climate risk considerations in its supervisory framework. we are setting out a roadmap for mandatory climate - related financial disclosures for all our financial institutions. next year, we will conduct stress tests for the financial industry under a range of climate scenarios. we are supporting capacity - building among central banks and supervisors in addressing environmental risks, such as through the cop26 climate training alliance initiative. a successful transition to net zero will require collective efforts across governments, businesses, and industry leaders globally.

, more ambitious capital requirements to absorb losses, improving coverage and reducing the risk of excessive borrowing. the countercyclical capital buffers are designed to reduce pro - cyclicality. at the same time, the supervision of financial institutions, financial markets and market infrastructure has been tightened, and the organisational structure of financial oversight has been overhauled. the european system risk board and the european supervisory authorities – the three new authorities created for the european banking sector, insurance and occupational pensions, and capital markets – have taken up their work at the beginning of this year. the esrb is in the process of developing the tools necessary to warn and, if appropriate, make recommendations as regards systemic risk. and the esas will allow closer monitoring of the interrelationships in the financial system of the european union. • but much remains to be done. most importantly, we need to ensure the full implementation of the envisioned reforms. in addition, key areas where work is still in progress – not only at the european, but also at global level – include : the treatment of systemically important financial institutions ; the mechanism of bank crisis management and resolution ; oversight of the shadow banking system ; and – very importantly – the further regulation and oversight of financial markets and their functioning. iv. conclusion let me conclude. the euro area as a whole has witnessed an unprecedented degree of price stability since its inception more than 12 years ago. this has been accompanied by economic performance in terms of growth per capita and job creation that compares positively with other large advanced economies. it is also remarkable that there is convincing evidence that the euro area and the united states of america have similar features in terms of diversity of the economies that are part of these vast continents : member countries on this side of the atlantic and the states on the other side. this is documented, in particular, as regards asymmetric inflation, asymmetric growth developments and even in terms of somewhat persistent asymmetric gains and losses of competitiveness. therefore, it is important to redress a common belief which is unfounded, in my opinion, namely that the euro area as a whole is significantly more heterogeneous economically, with more dispersion and higher levels of standard deviation of a number of important indicators than the us. but what remains true is that governing these very vast and equally diverse economies with a single currency is more of a challenge in a union of sovereign states than in a political federation. that is the reason why the european central bank is stress