yi gang : green finance and climate policy opening remarks by mr yi gang, governor of the people's bank of china, at a high - level seminar on " green finance and climate policy ", co - hosted by the people's bank of china and the international monetary fund, 15 april 2021. * * * madame managing director, ladies and gentleman, good morning and good evening. it gives me great pleasure to co - host this high - level seminar on “ green finance and climate policy ” with the imf. i wish to begin by extending a warm welcome to all the participants on behalf of the pbc. the international community is forming a broad consensus on tackling climate change. china has announced the goal of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060, also known as the 30 / 60 goal. this requires a comprehensive economic transition, and green finance can be an accelerator in this process. the pbc attaches great importance to green finance. in 2016, we led the effort in drafting the guidance on building a green financial system and developed a specific timetable and a roadmap for this purpose. by making sure that all the policies are implemented, we have put in place an initial policy framework for green finance. as a result, china ’ s green finance market has since enjoyed fast development. by the end of 2020, green loans and green bonds in china totalled 1. 8 trillion us dollars and 125 billion us dollars respectively, ranking as the world ’ s largest and second largest. more than 40 carbon neutral bonds have been issued, with a total volume of over 10 billion us dollars. the 30 / 60 goal has set a higher bar for the financial sector. to meet this goal, we need to overcome a host of challenges. first, on the society front, public awareness of emission reduction has to be raised. second, on the market front, the carbon market has to play a greater role in price discovery. only when carbon emission is priced in, can we achieve effective resources allocation. china ’ s carbon market is still in its initial stage, and its financial nature needs to be further clarified. third, on the institutional front, climate information disclosure needs to be improved. the disclosure should be expanded to cover listed companies, financial institutions and other market players, and move from a voluntary to a compulsory basis. fourth, on the risk management front, there needs to be greater attention to the fossil fuelrelated transition risks. fossil fuels, mainly coal

. after what has happened, we have not merely needed to ensure sufficient resources, but to put it beyond doubt that we have done so. no danger now, i think, that ireland ’ s regulatory authority would be seen as insufficiently resourced, and this is essential to bolster confidence in the financial system generally – not just the banks. i am conscious that this has been and continues to be a costly exercise. the government has not yet decided to pass through the full cost of the regulatory apparatus to the regulated firms – the percentage passed - through is still only 50 per cent – nevertheless, the market certainly complains about growing out - of - pocket regulatory costs. let me speak a little more on the second aspect – regulatory approach or regulatory philosophy. where does that now stand? what is the current regulatory philosophy? there are a number of dimensions : obtrusive and intrusive as opposed to light - touch. the previous tendency – not confined to ireland – to regard business leaders in financial services with awe and deference has had to be abandoned. of course there is no call for being disrespectful. but supervisors need to be prepared to be assertive with firms if, after a period of dialogue, they remain unconvinced that a risk has been properly mitigated. regulators may not be able to see everything, but the crisis has put beyond doubt the idea that bank ceos can either. it follows from this that a culture of challenge has to be inculcated within organisations too, both the regulator and the regulated. this dimension also relates to a more challenging fitness and probity regime – recently extended to cover not only new entrants, but existing directors, senior management and relevant staff. when the whole system has failed, it should not be a surprise to find that, one way or another, very few of those who were the very top decision makers in irish banks before the crisis are still acting as bank directors today. includes examination of the downside risk of portfolios and positions, not just governance arrangements and broad business plans. to be sure, supervisors cannot constantly monitor rapidly changing market portfolios, nor can they hope to track every transaction and exposure even in slower moving parts of the business. indeed, it needs to be recalled that the increased emphasis that has rightly been bis central bankers ’ speeches placed worldwide ( since the 1980s ) on governance and systems was originally a rational response to the declining ability of direct supervision of each institution