prices and inflation. unsurprisingly, this has created pressure to deprioritize energy transition plans. in some cases, public and private - sector players are taking actions that are inconsistent with their stated net zero ambitions. the gap between commitment and action is growing ever wider. at the same time, risks from climate change keep rising. in february, the intergovernmental panel on climate change ( ipcc ) published its sixth assessment report. it paints an alarming picture of the physical risks of climate change. the report warns of more frequent and intense extreme weather and climate events. it warns of unavoidable climate hazards over the next two decades even with global warming of the targeted 1. 5 degrees. the consequences of exceeding that target are even more dire. together, these developments should reinforce, rather than deflect from international sustainability ambitions. as i mentioned at the start, the financial sector must play its part, both to help meet net zero targets and to manage the financial risks from climate change. the two goals are closely connected. if the transition to a low carbon economy is delayed or disorderly, the global economy and financial system will face significant risks. this was the conclusion of recent climate scenario analysis and stress tests conducted by financial authorities across various jurisdictions. by further deepening our understanding of these financial risks, we can not only protect the financial system, but help to give greater impetus to a timely and orderly transition. the fsb roadmap for addressing climate - related financial risks has been developed to coordinate ambitious actions to assess and address these risks. since the launch of the roadmap in july last year, progress has been made across all four of its building blocks : disclosures, data, vulnerabilities analysis, and regulatory and supervisory practices and tools. allow me to briefly elaborate on these four building blocks, stressing their interdependencies. let me start with disclosures. work to strengthen the quality and consistency of climate - related financial disclosures has been moving forward rapidly. the international sustainability standards board ( issb ) has made very encouraging progress, building on the task force on climate - related financial disclosures ’ ( tcfd ) recommendations. the issb ’ s two exposure drafts set out baseline standards for both general sustainability - related, and more specific climate - related disclosures. this marks a key milestone in the move towards establishing globally consistent, comparable and decision - useful disclosures. the issb is taking a building

masaaki shirakawa : international financial stability as a public good keynote address by mr masaaki shirakawa, governor of the bank of japan, at a high - level seminar, co - hosted by the bank of japan and the international monetary fund, tokyo, 14 october 2012. * * * introduction once again, it is a great pleasure for me to welcome you to tokyo on the occasion of the annual imf - world bank meetings. about two years ago, at the per jacobsson lecture in basel, my old and respected friend, the late tommaso padoa - schioppa, offered his insights on how to strengthen the governance of the rapidly integrating global economy. 1 since then, the subject has been in a corner of my mind. today, i am happy to co - host with the international monetary fund a high - level seminar devoted to that topic. many of you here today probably heard tommaso forcefully present his case, but for those members of the audience who were not on hand at that time, i would first like to offer you a brief summary. tommaso observed that one of the causes of the great financial crisis was the failure of national governments to properly rein in market forces, which were fast becoming global in nature. he saw that the increase in cross - border financial activities required a corresponding increase in the provision of basic facilities or services – supporting or facilitating those activities – including prudent regulation and supervision from a cross - border perspective. nevertheless, the supply of such facilities or services was deficient or lacking because national governments inherently could not provide for them. the solution, he argued, was to enhance supranational governance of the global economy. i. the great financial crisis and the supply of global public goods as tommaso and many others have pointed out, the great financial crisis has exposed the naive simplicity of the view that, if the economic policies of individual economies are geared towards domestic economic stability, and private actors are allowed to operate freely in such an environment, the global economy would be all right. the painful realization is that the self - correcting power of the market goes only so far. markets must sometimes be nudged, pushed, or even forcefully shoved off their existing trajectory so as to prevent them from running into disasters. in order to function properly, markets also depend on things that are not provided spontaneously by themselves, such as the rule of law, respect for private property, and the safety and freedom of passage