. partior – a commercial joint venture among jp morgan, dbs and temasek - has been able to achieve reductions in settlement time from days to mere minutes for singapore dollar and us dollar exchanges, using a blockchain based multicurrency cross border clearing and settlement platform. these initiatives by the private and the official sector will help to achieve cheaper, faster and more transparent cross border payments and settlements internationally, and ultimately improving the lives of people. the second problem statement crying for a fintech solution is ensuring a highquality, trusted esg data ecosystem. good esg data is foundational for the climate agenda. first, it facilitates effective management of climate - related risks. many central banks, including mas, are very keen to understand the impact of climate risk for financial stability. second, it enables robust sustainability reporting. quality data is foundational in our fight against greenwashing and in enabling relevant stakeholders to make effective esg - investment decisions. third, it helps to catalyse green and transition finance flows. there is a significant gap between esg data needs and the esg data available. we need good data on firms'carbon footprint, historical carbon emission trends, and compliance with their respective transition targets. we also need data on the climate - related risks their physical assets are vulnerable to. but the esg data acquisition process is often manual, tedious and costly. esg data verification is at a nascent stage. this impacts the credibility of reporting. fintech can be a key enabler in addressing these esg data challenges. 5 / 8 bis - central bankers'speeches data acquisition. fintech firms are offering solutions that connect directly via application programming interfaces ( apis ) to sustainability projects, such as waste management systems, to retrieve relevant environmental and energy consumption data more efficiently and directly. data provenance. distributed ledger technology is being explored to address the issue of verifiability and traceability in data. data for reporting. fintech firms are offering automated reporting tools while staying agile to adapt to various reporting standards. for example, matter analytics offers reporting solutions that help asset managers and banks automatically generate customised and comprehensive impact reports for their clients. fintechs are providing financial institutions with good data and analytics to evaluate and compare esg performance. for example, intensel uses artificial intelligence to examine and monitor climate data and satellite imagery to identify financial risks related to climate change. in short, we need fintech to do in the sustainability space what

volatility. this change in market perception of future risk has occurred in the context, however, of a substantial increase in leverage in the balance sheets of the united states, the federal government and the u. s. household sector. these developments are a potential source of greater macroeconomic uncertainty. the second reason for greater attention to prudential concerns is that we are in the midst of substantial changes in the structure of the u. s. financial system. the largest financial institutions in our markets are substantially larger than even a decade ago in the scope and complexity of their operations and in terms of their importance in the markets in which they operate. hedge funds and other financial institutions that operate outside the scope of regulation or consolidated supervision now play a more important role in our financial markets. and we have seen a new way of financial innovation in credit risk transfer techniques and many new derivative instruments that have allowed risk to be measured and managed more effectively and distributed more broadly. these developments have contributed to what seems to be a significant improvement in the overall stability and resilience of the us financial system, by reducing the vulnerability of individual institutions to a broader range of potential shocks. they may also, however, add to uncertainty about how well the system might function in the context of a major systemic shock. and in this sense, they create some exacting challenges for risk management. let me focus on three areas where this is the case : counterparty risk management with respect to hedge funds and other unregulated entities ; risk management and market infrastructure issues in credit derivatives and other instruments ; and stress testing and scenario analysis. 1 / 3 first, the greater role of hedge funds and other unregulated entities in our financial system today requires more attention by the major banks and investment banks to counterparty risk management. the greater diversity of participants in risk intermediation is probably on balance a positive thing for our financial system. hedge funds, private equity funds and other kinds of investment vehicles help to disperse risk and add liquidity. their greater prominence in our markets, however, means that banks and investment banks face a heightened challenge in managing the risks involved in their exposure to these firms and in understanding the firms ’ ability to weather conditions of stress and their impact on market conditions in those circumstances. the degree of the systemic risk presented by the growth in the leveraged, unregulated financial institutions depends in part on how well the major dealers manage these challenges. market practice in these areas has improved significantly since 1998