##ossessions were divided 50 : 50 between court orders and voluntary surrenders. while it is only one option in the resolution of npls, loan sales can play an important role in transferring risks from the banks to other types of investors, which reduces the vulnerability of the domestic banking system to future adverse shocks. it is critical to stress that our codes of conduct are afforded to all borrowers. the introduction of the credit servicing regime in 2015 ensures that an unregulated loan owner cannot instruct a credit servicing firm to implement an action that would be inconsistent with the requirements of irish financial services legislation as it applies to regulated lenders. in short, the 2015 legislation significantly strengthened the protections of borrowers in the event of their loans being sold to non - bank entities. crucially, customers whose loans are sold to an unregulated entity continue to have the benefit of the same regulatory protections they had before the sale. as you are aware, the minister has asked the central bank to provide a report on the effectiveness and operation of the ccma in the context of the sale of loan books : this review provides an opportunity to assess the current code and identify any necessary adjustments. eu developments in banking regulation turning to developments at a european level, on 14 march 2018, the commission published a proposal for a directive on credit servicers, credit purchasers and the recovery of collateral. the aim of this proposal is to develop a european approach to the issue of the transfer of npls. a more integrated financial system will enhance the resilience to adverse shocks by facilitating private risk sharing across borders, while at the same time reducing the need for public risk sharing. the first part of the proposed directive establishes a framework for servicers and purchasers of credit agreements issued by credit institutions. this approach is similar to the current enacted credit servicing framework in ireland : an unregulated loan owner must appoint a regulated credit servicing firm, but the loan owner does not itself require authorisation. the initiative also aims to further develop secondary markets for npls, with the aim of facilitating loan servicing by third parties and the transfer of loans to third parties. the proposals aim to reinforce the banking prudential regulatory framework to address the longstanding issue of npls for all european banks. moving from risk reduction to risk sharing, the proposal for a european deposit insurance scheme ( edis ) represents a further step in the completion of the banking union whereby all depositors within the banking union would enjoy the same level of

changing public sentiments, and new laws to govern carbon emission can cause a shift in economic activity towards greener projects. as a result, the value of carbon - intensive assets might drop as investors ’ risk perception and preferences change. sectors like oil, gas, coal and utilities are particularly vulnerable in the long run as transition risk might devalue their assets and displace their workforce. central bank of kuwait - public عام - بنك الكويت المركزي international energy agency ( iea ) estimates that achieving paris agreement target on climate change would require, by 2050, about 80 % decrease in the co2 intensity of the building sector, 95 % of world energy supply to be of low carbon and 70 % of new cars to be electric. this will cause significant, even if slower, shift in the structure of our economies with strong bearing on the financial sector. that is why the ngfs, the central banks and supervisors network for greening the financial system, has argued that ‘ climate related risks are a source of financial risk and therefore fall squarely within the mandate of central banks and supervisors to ensure that financial system is resilient to these risks ’. regulators need to determine how best to incorporate and operationalize climate related risks in their prudential policy settings. it would require expanding the risk matrix to formally include climate related risks and enhancing the analytical tools to assess financial sector exposures to extreme weather events. bank of england has announced that in 2021, it will start stress - testing banks on different climate pathways. ultimately, the key is to retool the regulatory regime to factor in risks to climate change in a holistic fashion, instead of adding on an additional item in the risk matrix. conclusion let me conclude. while we have managed to fix the fault lines exposed by the gfc, our understanding and ability to respond to some of the emerging risks remain limited. this is true for both cyber threats and climate change. a feature common to these risks is their wider impact through multiple entry points. hence, the key to address both lies in sharing information and strengthening cooperation. if we are grappling with risks that transcend sectoral and national boundaries, so should our response. thank you for your attention. 11 / 12 / 2019 central bank of kuwait - public عام - بنك الكويت المركزي