. similarly, an outflow of funds arising from developments in a distant country, such as for example indonesia, can very easily lead to an increase in south african interest rates when we would have liked to have seen a decline. south african share prices are also affected by the views of foreign investors and do not always truly reflect the actual potential of south african companies. developments in the prices in london, new york, paris and tokyo often have a greater influence on these prices than developments in south africa. even the south african inflation rate tends to move to lower levels in accordance with the inflation rates in the rest of the world. inflationary errors that are made with domestic macroeconomic policy under these circumstances, will often have a detrimental effect on the south african balance of payments, or aggregate domestic economic activity, before leading to an increase in prices. 4. economic forecasting : a difficult task against the background of the international integration of financial markets it becomes much more difficult to predict developments in financial aggregates, such as interest rates, exchange rates and the inflation rate. it does not only depend on what happens in the better known own national economy, but requires a broader cosmopolitan knowledge. mr. alan greenspan ’ s decisions often can have a greater influence on the developments of these aggregates in south africa than decisions of the governor of the south african reserve bank. unfortunately, businessmen, investors and economic policy makers often have to take a view about possible future developments in these financial aggregates. the decisions they have to take are mainly concerned about the future, and not about the past or present situation. it is therefore essential that forecasts be made, even if it is done in a framework of greater uncertainty and unforeseeable future developments. with all the modern electronic technology which is available to facilitate forecasts, the world of the actual economy remains too uncertain to be always correct. there are a few basic principles which must be kept in mind when making forecasts of financial aggregates : 1. do not believe too much in your own forecasts. there are good reasons why you will often be wrong. [UNK] - [UNK] 2. do not accuse someone else - for example, the governor of the reserve bank - if your forecasts are wrong. he also has only little control over developments in these macroeconomic aggregates. 3. make regular forecasts. the data on which forecasts are usually based change often and therefore justify regular revisions of forecasts. 4. be willing to acknowledge a wrong forecast and

policy. a thorough risk assessment is essential for protecting central banks ’ own balance sheets. besides, central banks can act as catalysts, linking the eligibility of assets to climate - related reporting. they could consider buying securities only from issuers that do fulfil proper disclosure requirements. tougher reporting requirements could boost the availability of data relevant to climate - related risk assessment. this would help the market to better price in climate risk. 4 conclusion ladies and gentlemen, just like japan, germany and the eu are committed to the goal of climate neutrality by 2050. therefore, markets needs to price in climate risk adequately. here transparency and disclosure are essential. 2 / 3 bis central bankers'speeches climate change cannot and will not wait, which is why we must act now. it is worth our joint effort. 3 / 3 bis central bankers'speeches