storms, floods, and wildfires, which have abrupt and devastating effects. we need to look at strategies that minimize loss and damage and adaptation financing is likely to be critical for building economic resilience and fostering sustainable development. climate related risks may also lead to macroeconomic impact on households, companies, and sovereigns affecting consumption, production, and investment patterns. given their exposures to firms whether in the form of credit or investments, as well as their own operations, these risks impact the financial institutions through traditional risks categories of credit, market, liquidity, and operational risks. these losses may get amplified through interconnectedness among the financial sector players, between the financial and non - financial sectors, as well as within the nonfinancial sector. the inter - linkages between physical risk and transition risk may also act as a particular source for non - linear risk impacting financial stability. these risks may also get magnified through cross border trade and production interdependencies3. regulatory response and challenges while there is some debate on whether or not climate change is part of a mandate for a central bank, the fact that it has a bearing on both price and financial stability means that there is a need for a regulatory response on risks arising from climate change. the impact on the financial system and economy arising from climate change is dependent on the extent of their exposures to these risks and mitigation measures that are in place. the dilemna and challenge faced by the regulators is to not only put in place an enabling ecosystem from prudential perspective but also act as an enabler and 2 / 6 bis - central bankers'speeches facilitator for orderly and sustainable development of the financial system and economy. given the significant inter - sectoral dependencies, the mitigation of climate change risks not only requires individual sectoral response from regulators, but also inter - regulatory co - ordination. the reserve bank of india has been proactive in its resolve to assess and mitigate the climate change risks that may impact the financial system. over the last few years, we have taken several incremental measures in this direction. it started with the setting up a dedicated group within the bank to assess climate change risks and foster a robust ecosystem for sustainable finance. this was followed by release of survey on climate risk and sustainable finance covering 34 scheduled commercial banks4, discussion paper on climate risk and sustainable finance5, followed by release of framework on green deposits6. reserve bank has been

analysis of 13 different fields of central banking and provide governor fullani with an assessment that will benchmark the bank of albania in terms of the standards applicable in the escb in these areas. it will be followed by another six - month analysis of seven central banking fields, which will provide governor hamza with a similar overview for the central bank of the republic of kosovo. i am very pleased that the national bank of the republic of macedonia, represented here by vice governor bajrami, has asked the ecb – as an additional component of this programme – to assist his institution in prioritising the next steps for the implementation of the recommendations of the needs analysis programme which the eurosystem completed for his central bank last year. our institutional relations with the central banks in the region go beyond this programme. the ecb monitors economic developments in the western balkans and regularly exchanges views on a variety of topics with its counterparts. for example, the ecb, together with the central banks of the region, organises a dedicated seminar on statistics ( the last one was bis central bankers ’ speeches organised jointly with the national bank of the republic of macedonia ) and a similar event is planned on target ii and t2s project. moreover, a series of regional workshops on other issues of mutual interest for central banks is in the pipeline. we have also expanded the list of escb training activities that are open to staff from central banks in the western balkans. our work draws on the expertise of many eu national central banks that are also very active in a number of other initiatives in the region. strong central banks are key for monetary and financial stability in europe and around the world. with this programme, the central banking community in the eu stands ready to support our colleagues in the western balkans in their endeavour to introduce the highest standards, for the benefit of their countries and people. the programme will strengthen the already well - developed relations between our institutions. these relations also reflect the importance of economic and financial links between the euro area and the western balkans. the region is undergoing a remarkable economic and institutional transformation, benefiting from on - going integration into pan - european production chains and the resulting trade links, as well as from sizeable capital inflows originating from europe. this has helped the region to embark on a process of catching - up economically with the wealthier parts of the eu and to gradually improve their living standards. at the same time, these close economic and financial ties imply that the western balkan economies have